- Opendoor reported better-than-expected third-quarter results and issued fourth-quarter guidance that also topped estimates.
- Shares surged, landing a week after rival Zillow announced its departure from the so-called iBuying market.
- Opendoor said it sold 5,988 homes during the period, up 72% from the second quarter.
A week after Zillow announced its abrupt departure from the home-buying market, rival Opendoor reported third quarter results Which topped estimates and issued an optimistic forecast for the rest of the year, leading the stock to rise in extended trading.
Opendoor jumped 16% after hours to $22.48. Before the post-market rally, the stock was down 1% for the year.
Revenue in the quarter rose to $2.27 billion from $338.6 million a year ago, when the COVID-19 pandemic temporarily put a halt to transactions. According to Refinitiv, revenue was up 91% from the second quarter, and exceeded the average analyst estimate of $2.01 billion.
Founded in 2014, Opendoor pioneered the instant-buying, or iBuying, home market by allowing homeowners to sell their home for cash without listing it on the market and having to deal with the lengthy bidding and closing process. The company went public in December through a special purpose acquisition company.
Zillow started test The iBuying market took a big leap in 2017 and two years later, when it began buying and selling in Southern California. The business initially worked, but suffered major setbacks this year as massive swings in home prices undermined Zillow’s predictive model and ultimately left the company spending more on properties than it could sell them. .
Zillow shares fell 25% after its announced departure from the market last week and the company said it was laying off a quarter of its workforce. The stock has lost more than two-thirds of its value since peaking in mid-February.
In an interview following Opendoor’s report on Wednesday, finance chief Carrie Wheeler said the company has built its technology to ensure it can manage through unexpected market events.
“We’re really good at pricing,” Wheeler said. “We’ve been doing this for seven years. That’s the core of what we do. We’re focused on the data.”
In addition to exceeding revenue estimates, Opendoor’s loss of 9 cents per share was below analysts’ expectation of a 17-cent loss. And for the fourth quarter, according to Refinitv, Opendoor forecast revenue of $3.1 billion to $3.2 billion, well above the average analyst estimate of $2.92 billion.
Opendoor sold 5,988 homes during the period, up 72% from the second quarter, and it bought 15,181 homes, up 79% from the previous period.
Wheeler said after the earnings call, “We exited the high end of our guidance, primarily due to strong home acquisition growth and unit volumes driven by the overall strength of home demand, which led to faster-than-expected sales. Hui.” Report.
Watch: Zillow CEO on exiting home-flipping business