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OPEN's Profitability Milestone: A Turning Point for the iBuyer Model?
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Key Takeaways
Opendoor reported $23M adjusted EBITDA in Q2, its first profitable quarter in three years.
OPEN ended Q2 with $789M in cash and $7.8B in borrowing capacity, bolstered by new notes.
Cash Plus and the agent platform expand OPEN's capital-light, fee-driven revenue streams.
Opendoor Technologies (OPEN - Free Report) is entering a pivotal stage as macroeconomic headwinds reshape the housing landscape. With mortgage rates elevated and resale clearance slowing, the iBuyer is prioritizing profitability over pure volume growth. In second-quarter 2025, the company reported $23 million in adjusted EBITDA, marking its first profitable quarter in three years.
The shift reflects tighter spreads, disciplined underwriting and targeted marketing investments aimed at stabilizing unit economics. During the second quarter, revenues came in at $1.57 billion, while contribution profit reached $69 million, representing a 4.4% margin compared with 6.3% a year earlier. Home acquisitions totaled 1,757, down year over year, underscoring management’s cautious stance in a market weighed down by weak buyer demand and record delistings.
Financial flexibility remains a key asset. The company ended the quarter with $789 million in unrestricted cash and $7.8 billion in borrowing capacity, strengthened further by a $325 million convertible notes issuance that extended maturities and added liquidity. This balance sheet position allows Opendoor to pursue growth initiatives even as near-term volumes remain constrained.
Strategically, the company is layering on products like Cash Plus, which lowers upfront capital requirements while offering sellers additional upside at resale. Coupled with the rollout of its distributed agent platform, Opendoor is broadening its revenue mix toward more capital-light, fee-driven streams. It is optimistic and anticipates these as levers to enhance operating leverage.
Still, challenges remain. An unfavorable mix of older inventory will likely continue to weigh on results, while elevated spreads reflect a cautious approach to pricing risk in an uncertain housing environment. OPEN expects the third-quarter adjusted EBITDA loss to be between $21 million and $28 million.
Shares of Opendoor have skyrocketed 874.4% in the past three months compared with the industry’s growth of 8.8%. In the same time frame, other industry players like Chegg, Inc. (CHGG - Free Report) and EverCommerce Inc. (EVCM - Free Report) have gained 12.2% and 15.8%, respectively, while Exodus Movement, Inc. (EXOD - Free Report) has declined 13.1%.
OPEN Three-Month Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, OPEN trades at a forward price-to-sales (P/S) multiple of 0.84X, significantly below the industry’s average of 5.77X. Conversely, industry players, such as Chegg, Exodus and EverCommerce, have P/S multiples of 0.48X, 6.32X and 3.35X, respectively.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for OPEN’s 2025 loss per share has widened from 21 cents to 24 cents in the past 60 days. This reflects weakening analyst sentiment and diminished confidence in the stock’s near-term outlook.
The company is likely to report strong earnings, with projections indicating a 35.1% rise in 2025. Conversely, industry players like Chegg and Exodus are likely to witness a fall of 114.7% and 52.2%, respectively, year over year in 2025 earnings. Meanwhile, EverCommerce’s earnings in 2025 are expected to surge 131.8% year over year.
Image: Bigstock
OPEN's Profitability Milestone: A Turning Point for the iBuyer Model?
Key Takeaways
Opendoor Technologies (OPEN - Free Report) is entering a pivotal stage as macroeconomic headwinds reshape the housing landscape. With mortgage rates elevated and resale clearance slowing, the iBuyer is prioritizing profitability over pure volume growth. In second-quarter 2025, the company reported $23 million in adjusted EBITDA, marking its first profitable quarter in three years.
The shift reflects tighter spreads, disciplined underwriting and targeted marketing investments aimed at stabilizing unit economics. During the second quarter, revenues came in at $1.57 billion, while contribution profit reached $69 million, representing a 4.4% margin compared with 6.3% a year earlier. Home acquisitions totaled 1,757, down year over year, underscoring management’s cautious stance in a market weighed down by weak buyer demand and record delistings.
Financial flexibility remains a key asset. The company ended the quarter with $789 million in unrestricted cash and $7.8 billion in borrowing capacity, strengthened further by a $325 million convertible notes issuance that extended maturities and added liquidity. This balance sheet position allows Opendoor to pursue growth initiatives even as near-term volumes remain constrained.
Strategically, the company is layering on products like Cash Plus, which lowers upfront capital requirements while offering sellers additional upside at resale. Coupled with the rollout of its distributed agent platform, Opendoor is broadening its revenue mix toward more capital-light, fee-driven streams. It is optimistic and anticipates these as levers to enhance operating leverage.
Still, challenges remain. An unfavorable mix of older inventory will likely continue to weigh on results, while elevated spreads reflect a cautious approach to pricing risk in an uncertain housing environment. OPEN expects the third-quarter adjusted EBITDA loss to be between $21 million and $28 million.
OPEN’s Stock Price Performance, Valuation & Estimates
Shares of Opendoor have skyrocketed 874.4% in the past three months compared with the industry’s growth of 8.8%. In the same time frame, other industry players like Chegg, Inc. (CHGG - Free Report) and EverCommerce Inc. (EVCM - Free Report) have gained 12.2% and 15.8%, respectively, while Exodus Movement, Inc. (EXOD - Free Report) has declined 13.1%.
OPEN Three-Month Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, OPEN trades at a forward price-to-sales (P/S) multiple of 0.84X, significantly below the industry’s average of 5.77X. Conversely, industry players, such as Chegg, Exodus and EverCommerce, have P/S multiples of 0.48X, 6.32X and 3.35X, respectively.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for OPEN’s 2025 loss per share has widened from 21 cents to 24 cents in the past 60 days. This reflects weakening analyst sentiment and diminished confidence in the stock’s near-term outlook.
The company is likely to report strong earnings, with projections indicating a 35.1% rise in 2025. Conversely, industry players like Chegg and Exodus are likely to witness a fall of 114.7% and 52.2%, respectively, year over year in 2025 earnings. Meanwhile, EverCommerce’s earnings in 2025 are expected to surge 131.8% year over year.
Image Source: Zacks Investment Research
OPEN stock currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.