Key Takeaways
- CEO Kaz Nejatian announced Opendoor has yet to achieve ANI break-even, delaying the profitability target by six to eight weeks.
- Shares declined approximately 7% to $2.79, extending the year-to-date loss to 51%.
- A severe housing market downturn in late August hampered home sales and maintained high delisting rates.
- Third-quarter revenue is projected to increase 10%-15% annually, while contribution profit should jump 70%-75%.
- Treasury yields reaching a three-year peak are intensifying challenges for Opendoor’s inventory-based business model.
Shares of Opendoor Technologies (OPEN) plummeted roughly 7% to $2.79 during Thursday’s session, marking a new 52-week low and pushing the year-to-date decline to 51%.
Opendoor Technologies Inc., OPEN
The sharp decline followed a Wednesday post on X by CEO Kaz Nejatian, who revealed the company remains short of adjusted net income (ANI) break-even, with the target now delayed by six to eight weeks beyond earlier projections.
“There has been a lot of speculation lately about where Opendoor is on the path to ANI break-even, and I worry some folks think we are further ahead than we actually are,” Nejatian stated in his message.
According to the CEO, the postponement stems from a significant weakening in housing market conditions during late August’s final two weeks, characterized by slower home sales and persistently high delistings.
“The last two weeks of August were among the worst we have seen for housing in years,” the CEO explained.
Even with this delay, Nejatian maintained that Opendoor remains on track to achieve ANI-positive status on a trailing 12-month basis by the end of 2026. This projection hinges on the company’s ability to maintain rapid home acquisition and resale cycles.
Third Quarter Outlook Shows Revenue Expansion
Looking ahead to Q3, Opendoor forecasts revenue will expand 10%-15% year-over-year. The company anticipates contribution profit will surge 70%-75%, while contribution margin is expected to fall within a range of 3.2% to 3.5%.
The 12-month window of adjusted EBITDA profitability is now anticipated to commence during the current quarter, approximately six to eight weeks behind the original guidance.
In his announcement, Nejatian also emphasized a strategic shift from the company’s previous operational philosophy. He noted that the former approach of extending holding periods to preserve margins actually weakened the business, and that Opendoor will now focus on rapid inventory turnover, even if it means sacrificing short-term margin gains.
“Time has a cost, and selling homes fast is the discipline this business requires.”
Rising Treasury Yields Create Additional Headwinds
The company faces mounting pressure from escalating interest rates. Benchmark Treasury yields surged to a three-year high this week, creating direct challenges for Opendoor’s business model. Since the company purchases homes for its balance sheet and retains them until resale, elevated yields increase financing expenses and reduce the speed at which properties can be sold at desired margin levels.
In contrast, competitors like Offerpad and Zillow, which operate with less inventory-intensive models, experienced only 2%-3% declines on Thursday.
Nejatian assumed the CEO role in September 2025. Under his leadership, the company has implemented workforce reductions, decreased consultant reliance, introduced AI-powered tools, and grown its mortgage division. Despite these initiatives, second-quarter revenue plunged 44% to $883 million, while the net loss expanded more than fivefold to $162 million.
With the Federal Reserve scheduled to convene next week and rate decisions pending, Opendoor’s inventory-related expenses remain under significant pressure in the immediate term.
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