What happened
Shares of Offerpad Solutions (OPAD 2.01%), an iBuyer ("instant buyer" and seller) of residential real estate, surged 40.9% in February, according to data from S&P Global Market Intelligence. The stock's gain is largely attributable to the company's release of a fourth-quarter 2021 report that was better than many investors were likely expecting.
For context, the S&P 500 and Nasdaq Composite fell 3% and 3.4%, respectively, last month.
Offerpad might be a new name to many investors, as the tech-enabled online buyer and seller of homes only began trading on Sept. 2, 2021, when it went public via a special purpose acquisition company (SPAC). The company stock surged in the first couple of weeks after it began trading but then steadily fell through January.
Even after the February bump, the stock is still down 49% since it joined the ranks of the publicly traded, while the broader market has declined by about 4% over this period. A portion of the stock's drop is attributable to interest-rate sensitive stocks, including growth-focused tech stocks, falling out of favor with investors in recent months because of expectations of higher rates this year.
Image source: Getty Images.
So what
On Feb. 23, Offerpad reported fourth-quarter 2021 results that delighted investors, who sent shares soaring 26.5% on the following day and 32.9% in the three-day period following the release.
In Q4, the number of homes the company acquired rocketed 195% year over year to 3,049, and the number sold surged 185% to 2,423. Those sales drove a 289% increase in revenue to $867.5 million.
Net income was $12.8 million, or $0.05 per share, compared with a net loss of $1.3 million, or $0.02 per share, in the year-ago period. Adjusted for one-time items (including a $0.06 benefit from a non-cash change in the fair value of warrant liabilities), net loss was $2.8 million, or $0.01 per share, compared with a net loss of $1.3 million in the fourth quarter of 2021.
That adjusted net loss of $0.01 sailed by the analyst consensus estimate of an adjusted net loss of $0.08.
Now what
For the first quarter of 2022, management guided for home sales of 3,000 to 3,150 and for revenue of $1.1 billion to $1.15 billion. On an adjusted basis, Wall Street is expecting Offerpad to be profitable for the full year 2022.
Offerpad has a very limited history as a public company, so most investors should probably watch it for awhile before making any investment decisions.
