Opendoor rises as JPMorgan boosts earnings estimates following Q4 results
New CEO Kaz Nejatian said the cohort of homes purchased in October, his first full month running the company, is poised to be Opendoor’s most profitable October ever.
Opendoor Technologies is surging after its Q4 results showed the new management team’s plans to turn around the online real real estate company are bearing fruit.
Shares are up roughly 16% as of 9 a.m. ET after the company reported better-than-expected Q4 sales and adjusted EBITDA, along with guidance for a bottom-line loss in Q1 that included less red ink than Wall Street had feared.
While its Q1 revenue outlook disappointed, CFO Christy Schwartz attributed the anticipated 10% quarter-on-quarter decline to how aggressively older inventory had been cleared in Q4, with homes sold having surprised to the upside by 20%. As such, the company will use Q1 to “rebuild inventory with higher-quality homes that underpin our improved unit economics,” she said.
Early in the conference call, CEO Kaz Nejatian spotlighted the profitability of Opendoor’s October operations, which marked the first full month with him in charge of the company.
That month of home acquisitions, he said, “is on track to be the most profitable October cohort in company history,” based on its contribution margin, which is the how much Opendoor earns on the sale of homes following holding costs and selling costs as a share of revenue.
“We achieved this in the middle of the most aggressive market expansion in Opendoor’s history. Given that this isn’t really the strongest housing market, this performance I think shows a structural shift in how we operate, a shift that I genuinely think will be durable across macro cycles,” he said. “We are no longer a prop desk — we’re now a market maker.”
JPMorgan analyst Dae Lee kept an “overweight” rating and $8 price target on the stock in the wake of these results, while boosting adjusted EBITDA and earnings estimates for this year and the next. Lee also trimmed his top-line expectations for 2026 and 2027.
“We remain encouraged by leadership’s energy and believe OPEN’s transformation, product innovation, and speed will drive upside over time,” he wrote. “Near-term results reflect prior strategies, but reduced spreads and a tailored approach are already accelerating acquisitions and rebuilding volume.”
