Opendoor (OPEN) Stock: Is Now the Time to Buy?

TLDR

Table of Contents

Opendoor stock surged over 1,000% from June lows to around $10, driven by leadership changes and meme stock trading
Company hired Kaz Nejatian from Shopify as new CEO and brought back co-founders Keith Rabois and Eric Wu to the board
Achieved brief profitability with $23 million adjusted EBITDA in Q2 2025 after years of losses
Q3 guidance projects revenue decline to $800-875 million with return to negative EBITDA
Stock trades at premium 20x gross profit multiple despite unproven turnaround plan

Opendoor Technologies stock has become the poster child of 2025’s meme stock revival. Shares rocketed over 1,000% from June lows to reach $10, giving the company a $7.5 billion market cap.

The dramatic rally started when large professional investors began buying the beaten-down stock. Individual traders quickly followed, turning Opendoor into a social media darling.

The company’s digital real estate platform buys homes with cash offers then resells them. This home flipping model operates at national scale but with razor-thin margins.

There will be signs the day after OPEN hits $82 in your neighborhood
pic.twitter.com/hFfsjCYUrM
— Eric Jackson (@ericjackson) September 21, 2025

Last quarter’s gross margin hit just 8.2%. The business struggled through the housing market freeze of recent years.

Both revenue and gross profit dropped 70% from peak levels. Over the past 12 months, Opendoor generated $417 million in gross profit but posted a $305 million net loss.

Many investors expected bankruptcy before the activist-driven turnaround began. The stock bottomed at $0.51 in June before institutional buying sparked the rally.

Leadership Shakeup Drives Investor Optimism

Opendoor’s dramatic transformation started with major executive changes in September. The company ousted previous CEO Carrie Wheeler in August.

Kaz Nejatian joined as the new CEO on September 10. He previously served as chief operating officer at Shopify, the successful e-commerce software company.

The company also brought back co-founders Keith Rabois and Eric Wu to the board. Rabois takes the chairman role while Wu returns as a director.

This shift represents what management calls a return to “founder mode.” The new leadership team plans major layoffs to cut costs and eliminate what Rabois calls employee bloat.

Nejatian plans to end the work-from-home policy to boost innovation. He wants to apply tactics that worked at Shopify to turn around Opendoor.

His equity-heavy compensation package ties his success directly to stock performance. The new CEO faces high expectations given the massive stock run.

Financial Results Show Brief Profitability

Second quarter results revealed both progress and ongoing challenges. Revenue reached $1.6 billion, up modestly from the prior year.

Opendoor sold 4,299 homes during the period. More importantly, it achieved $23 million in adjusted EBITDA.

This marked the first positive adjusted EBITDA quarter since 2022. However, the thin margins tell the real story of the business struggles.

From gross profit of $128 million, the company spent heavily on operations. Marketing costs hit $86 million while general overhead reached $28 million.

Product development expenses totaled $21 million for the quarter. Interest expense added another $36 million drag on profitability.

The brief return to profitability proved short-lived. Third quarter guidance projects revenue dropping to the $800-875 million range.

Management expects adjusted EBITDA to return to negative territory in Q3. They cited inventory mix issues and market softness as key factors.

High mortgage rates continue suppressing buyer demand across housing markets. More listings are coming off the market as sellers wait for better conditions.

The company faces margin pressure from older inventory in the pipeline. Lower acquisition volumes create a worse mix of homes for resale.

Beyond cost cuts, Opendoor aims to expand into new revenue streams. Potential areas include title services, mortgages, and real estate agent partnerships.

These services could reduce reliance on the capital-intensive home buying business. The goal involves making transactions smoother for buyers and sellers.

The new leadership team has already started adding real estate agents as partners. They use Opendoor’s software to funnel demand to the platform.

Future changes may include artificial intelligence features, though specific details remain unclear. Nejatian only started the job on September 10.

At the current $10 stock price, Opendoor trades at roughly 20 times trailing gross profit. This represents a premium valuation for a company with no consistent profit history.

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