Opendoor Technologies Inc. (NASDAQ:OPEN) Just Released Its First-Quarter Earnings: Here's What Analysts Think

Shareholders in Opendoor Technologies Inc. (NASDAQ:OPEN) had a terrible week, as shares crashed 24% to US$14.15 in the week since its latest first-quarter results. Revenues came in 20% better than analyst models expected, at US$747mwhile statutory losses per share were US$0.48, in line with forecasts. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Opendoor Technologies after the latest results.

Check out our latest analysis for Opendoor Technologies

Following the latest results, Opendoor Technologies' five analysts are now forecasting revenues of US$4.60b in 2021. This would be a sizeable 122% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 41% to US$1.27. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$4.03b and losses of US$1.09 per share in 2021. Ergo, there's been a clear change in sentiment, with the analysts lifting this year's revenue estimates, while at the same time increasing their loss per share numbers to reflect the cost of achieving this growth.

The consensus price target stayed unchanged at US$35.20, seeming to suggest that higher forecast losses are not expected to have a long term impact on the valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Opendoor Technologies analyst has a price target of US$42.00 per share, while the most pessimistic values it at US$30.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Opendoor Technologies shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Opendoor Technologies is forecast to grow faster in the future than it has in the past, with revenues expected to display 189% annualised growth until the end of 2021. If achieved, this would be a much better result than the 55% annual decline over the past year. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 13% per year. Not only are Opendoor Technologies' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Opendoor Technologies analysts - going out to 2025, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Opendoor Technologies that you should be aware of.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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