Opendoor cut to neutral at Wedbush as inventory challenges persist

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The analysts told investors that for the company’s iBuying business to thrive, they believe product availability, as well as access to financing for the iBuyers and their retail customers, are important ingredients.

However, the current current market has a “dearth of existing home inventories, tightening credit standards for corporations, and consumer mortgage credit availability has plummeted to levels not seen since 2012,” the analysts wrote.

“At some point, one or all of these factors should improve, but in the near term, we do not see a catalyst to reverse those headwinds,” they added.

Assessing the company’s first-quarter earnings, which it will release on May 5, after the close, they stated that for F1Q23, they “expect $2.6 billion in sales, -51% yoy, which is nearly in line with the Thomson consensus estimate for a 50% yoy decline.”

“Our F1Q23 AEBITDA forecast for a $365 million loss versus a positive $176 million last year is also essentially in line with the consensus estimate. We expect a F1Q23 contribution margin after interest of -11.5% versus +5.6% last year.”