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A week ago, Opendoor Technologies Inc. (NASDAQ:OPEN) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Opendoor Technologies beat expectations with revenues of US$1.2b arriving 8.8% ahead of forecasts. The company also reported a statutory loss of US$0.12, 7.7% smaller than was expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the recent earnings report, the consensus from ten analysts covering Opendoor Technologies is for revenues of US$4.93b in 2025. This implies a noticeable 3.7% decline in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 44% to US$0.28. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$5.24b and losses of US$0.42 per share in 2025. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a very favorable reduction to losses per share in particular.
View our latest analysis for Opendoor Technologies
The analysts have cut their price target 17% to US$1.15per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Opendoor Technologies at US$2.00 per share, while the most bearish prices it at US$0.68. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 4.9% by the end of 2025. This indicates a significant reduction from annual growth of 7.1% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.7% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Opendoor Technologies is expected to lag the wider industry.