Opendoor Q3 earnings beat estimates
Eric Wu is the founder and chief executive at Opendoor. Opendoor flips houses. Opendoor headquarters in San Francisco, CA, May 18, 2017.
The New York Times| The New York Times
A week after ZillowIt was announced sudden departureFrom the home-buying industry, there are rivals Opendoor reported third-quarter resultsThe stock surged in extended trading after the forecaster gave an optimistic outlook for next year and exceeded all expectations.
After hours Opendoor surged 16% to $22.48. Before the rally after the market, Opendoor was down by 1% over the past year.
The quarter’s revenue jumped to $2.27 Billion from $338.6 Million a year ago, after the Covid-19 pandemic temporarily halted transactions. According to Refinitiv, revenue increased 91% over the previous quarter and more than the average estimate of $2.01 billion by analysts.
Opendoor, which was founded in 2014, pioneered instant-buying or iBuying home markets. It allows homeowners to quickly sell their homes for cash, without having to list them on the market, and not have to go through lengthy bidding processes. Through a company that was created for specialized purposes, the company became public in December.
Zillow was founded in testingIn 2017, iBuying was launched in the US and has been growing rapidly ever since. It began selling and buying properties in Southern California two years later. The company was initially successful, but it hit serious snags when Zillow’s models were unable to predict large swings in home values. Zillow ended up spending much more on properties than they could be selling.
Zillow shares plummeted 25%The company announced that it was laying off 25% of its employees following the announcement. Over two-thirds has been lost since the peak in February.
OpenDoor’s new model is disrupting real estate. The platform allows homeowners to buy and sell homes.
After Wednesday’s Opendoor report, Carrie Wheeler, chief finance officer of the company stated that it has developed its technology in order to manage unpredictable market conditions.
Wheeler claimed that pricing is a strength of his company. We’ve done it seven years. It is at the heart of everything we do. It’s all about data.
Opendoor lost 9 cents per share, which was less than the 17.-cent loss analysts expected. Opendoor also forecasts revenue at $3.1 billion-$3.2 billion for its fourth quarter. This is higher than the average analyst estimate of $2.92 trillion, Refinitv says.
Opendoor purchased 15,181 houses and sold 5,988 homes in this period. This was 72% more than the previous quarter.
Wheeler, who spoke on the earnings conference after the report, stated, “We exited at the high end” of his guidance. This was primarily due in part to the unit volumes driven mainly by strong home acquisition growth. Also, the overall strength and demand for housing led to a quicker sell-through rate than we had anticipated.”