Opendoor Stock Slumps. The Real Estate Market Is Stagnant.

Opendoor Technologies is an online company that buys and sells residential real estate. (Courtesy Opendoor)

Opendoor Technologies, a home buying and selling company whose shares surged earlier this month, was dropping in after-hours trading following its second-quarter earnings release.

The company reported a loss per share of four cents, slightly more than the three-cent loss analysts estimated, on about $1.6 billion in revenue, which beat the $1.5 billion that analysts had expected, according to FactSet.

Opendoor stock was down 16.7% in after-hours trading.

The company is known for its technology-assisted business model buying and selling houses. Known as iBuying, the business model was hot during the pandemic—but became more difficult once the housing market shifted. Both Zillow Group and Redfin ended their separate iBuying businesses, in late 2021 and 2022, respectively

Opendoor in its second quarter sold 4,299 homes, beating estimates calling for 3,934 sales, and bought 1,757 homes, more than the 1,708 analysts had expected.

In a letter to investors, Opendoor CEO Carrie Wheeler noted that the company is deepening its relationship with real estate agents. “While we were once seen as disruptors, today we’re collaborators,” she wrote. Opendoor is partnering with real estate agents in all of the markets it operates in after a test pilot, the company said in its letter to investors.

The housing market consistently slowed through the quarter, Wheeler noted—and its acquisitions slowed in response. “Looking ahead, we believe housing market weakness will persist, and we are not assuming any near-term catalyst for improvement,” she wrote.

“We expect to see sequential acquisition and resale volume declines driven by a combination of macro dynamics, typical seasonal patterns in our cash offer business, and the early-stage nature of our platform pivot, which will take time to mature,” Wheeler added.

The company expects to acquire about 1,200 homes in its third quarter, with revenue between $800 million and $875 million. That’s fewer than the 2,493 acquisitions and $1.2 billion in revenue analysts forecast for the third quarter, according to FactSet.

The stock drop followed a surge that brought Opendoor from the doorstep of a reverse stock-split to the echelons of meme stocks. The company, whose stock price fell as low as 51 cents this year, was at risk of being delisted from the Nasdaq and was considering a reverse stock split before investors piled into the shares in July.

Opendoor stock closed at $2.52 on Tuesday, according to Dow Jones Market Data.

Write to Shaina Mishkin at shaina.mishkin@dowjones.com