Offerpad Solutions (OPAD) Stock Forecast & Price Target

Offerpad Solutions Inc is poised for positive growth due to its expansion of asset-light services, which contributed approximately 33% to its contribution profit after interest in the fourth quarter, enhancing overall margins. The company has effectively reduced customer acquisition costs by over 45% year-over-year through its Agent Partnership Program, which now accounts for nearly one-third of acquisitions. Additionally, significant operating expense reductions of around $70 million and $44 million are expected in 2023 and 2024, respectively, supporting a trajectory towards adjusted EBITDA breakeven by the end of 2025.

Offerpad Solutions Inc. has faced a negative outlook following its softer-than-expected guidance for 1Q25, which includes lower forecasts for revenue, homes sold, and home acquisitions, thereby resulting in an approximate 8% decline in aftermarket trading. The residential real estate industry continues to experience challenges due to elevated interest rates, producing a lock-in effect that has led to reduced transaction volumes, thereby negatively impacting Offerpad's performance. Furthermore, despite a revenue finish that aligned with consensus for 4Q24, the adjusted EBITDA fell short of expectations, highlighting ongoing operational difficulties in a competitive landscape that remains fragmented.