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Investing.com - Keefe, Bruyette & Woods downgraded Opendoor Technologies (NASDAQ:OPEN) from Market Perform to Underperform on Wednesday, maintaining a price target of $1.00.
The downgrade follows Opendoor’s second-quarter results, which prompted the research firm to reduce its 2025 and 2026 non-GAAP EPS estimates to -$0.27 and -$0.22, respectively, from previous estimates of -$0.21 and -$0.14. The company’s weak gross profit margin of 8.05% and negative earnings trend align with InvestingPro data showing continued profitability challenges.
KBW also adjusted its AEBITDA estimates downward to -$72 million for 2025 and -$40 million for 2026, compared to prior forecasts of -$44 million and +$30 million.
Opendoor guided for second-half revenue approximately 40% below consensus expectations and announced a strategic pivot to an agent-led distribution model, according to KBW’s research note.
The firm expects widening losses in the second half of 2025 and uncertainty surrounding the company’s strategy pivot to pressure Opendoor shares, which currently trade near the high end of historical multiples. According to InvestingPro’s Fair Value analysis, the stock is currently trading close to its fair value, with analysts maintaining a cautious stance as reflected in their consensus recommendations.
In other recent news, Opendoor Technologies Inc. reported its second-quarter 2025 earnings, revealing a revenue of $1.6 billion, which surpassed the expected $1.5 billion. Despite this revenue beat, the company posted an earnings per share (EPS) loss of $0.04, slightly missing the anticipated loss of $0.03. In another development, UBS adjusted its price target for Opendoor to $1.60 from $1.30, while maintaining a Neutral rating on the stock. The firm also revised its fiscal year 2025 revenue and EBITDA estimates downward, suggesting a more cautious outlook. UBS indicated that it no longer expects Opendoor to return to year-over-year revenue growth in fiscal year 2026. Additionally, entrepreneur Anthony Pompliano announced a personal investment in Opendoor, which he shared on social media. Pompliano expressed confidence in the influence of retail investors in financial markets. These recent developments reflect a mix of optimism and caution surrounding Opendoor’s financial trajectory.
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