Shares of Opendoor Technologies (OPEN 28.17%) were soaring today after the online home flipper posted better-than-expected results in its first-quarter earnings report.

The stock had fallen sharply in recent months, but the latest round of results gave investors some hope that the company can build a viable business over the long term, especially in the face of a weak housing market.

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Opendoor moves closer to breakeven

Opendoor reported a revenue in decline of 2% to $1.15 billion in the quarter, ahead of the consensus at $1.06 billion. However, revenue isn't a useful metric for a company like Opendoor, as it can earn revenue from simply buying and selling homes, even if it doesn't earn a profit.

The real test is profitability, and the company did take a step toward breakeven with its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $30 million, narrowing from a loss of $50 million.

Management said that buyer demand continued to be weak, and that the rate at which homes go under contract is down 25% and delistings are up 30%, indicating weak demand from homebuyers due to high mortgage rates and concerns about a recession.

Despite those headwinds, investors were pleased with second-quarter guidance that called for an adjusted EBITDA profit of $10 million-$20 million. The company also acquired 3,609 homes in the first quarter, up 4% from a year ago heading to peak buying season.

What's next for Opendoor

Opendoor's share price has fallen to less than $1, a sign that investors have largely given up on the stock, and a recovery will be difficult to achieve without a significant improvement in the housing market.

Opendoor has $559 million in cash on the balance sheet, meaning it's not in danger of failure, but the company can't lose money forever. Peers like Zillow and Redfin have already given up on the iBuying business model.

At this point, it's still unclear if it will work for Opendoor.