Opendoor Technologies signed a multiyear agreement with Zillow. The stock is trading below its high and bearish. Would it be a good idea to buy the stock at the current price? Let's find out what's going on...
shutterstock.com - StockNews Residential real estate services are provided by Opendoor Technologies Inc. Customers can buy and sell homes online at the company's website.
The way people begin their moves will be changed by a multi-year partnership. Home sellers will be able to request an Opendoor offer to sell their homes.
The housing market has been impacted by inflation and interest rates. Homebuyers have seen a significant loss in purchasing power this year due to rising mortgage rates which are twice as high as they were in January. OPEN's near-term prospects may be negatively impacted by this.
Over the past year and a half, the company's shares have declined 74.6%. The stock was trading at a high of $25.32 but is now trading at a low.
There are things that could shape OPEN's performance in the future.
There has been a recent settlement.
OPEN agreed to make corporate-wide changes to its practices after reaching an agreement with the FTC. The FTC investigated OPEN for promising consumers that they would make more money selling their houses to the company than they would on the traditional market.
The decision to settle with the Commission will allow us to resolve the matter and focus on helping consumers buy, sell and move with simplicity, certainty and speed.
The profit margins are negative.
The OPEN's trailing-12-month CAPEX/Sales multiple is lower than the industry average. Its trailing-12-month ROA, net income margin, and return on equity are all negative. Its trailing-12-month negative gross profit margin of 9.7% is worse than the industry average.
The earnings estimates are poor.
Street expects its earnings to decline in the current quarter and next quarter. Its earnings per share is expected to be negative in the current and next year. OPEN failed to beat the estimates in two of the four quarters.
POWR ratings reflect aleak outlook.
OPEN has a Strong Sell rating in our POWR Ratings system. The POWR Ratings are calculated using 118 different factors.
Each stock is evaluated based on eight categories. Open received an F grade for stability and sentiment. The stock's stability grade is in sync with the stock's alpha. Weak earnings estimates are consistent with the sentiment grade.
OPEN is a stock in the real estate services industry.
You can view OPEN ratings for growth, quality, momentum, and value here.
The bottom line.
OPEN could benefit from the new partnership with Zillow. The company recently agreed to pay a large amount to the FTC. The housing market is under pressure due to rising interest rates and inflation. The stock is best avoided because of its weak earnings estimates.
Opendoor Technologies Inc. stacks up against its peers.
OPEN has an overall F rating, but its industry peers have an overall B rating.
The shares were trading at $4.43 per share on Thursday morning. OPEN has declined since the beginning of the year while the S&P 500 has risen.
A financial journalist and equity research analyst, Pragya is passionate about investing She majored in finance in college and is currently pursuing a degree in economics.
There is more.
Is open stock a smart buy?
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