We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Opendoor Stock Tumbles 11% in a Month: Should You Buy the Weakness?
Read MoreHide Full Article
Key Takeaways
OPEN fell 11.4% in a month, underperforming its sector, industry peers, and the S&P 500.
Q3 revenue fell 34% as OPEN cleared old inventory, with contribution margin slipping to 2.2%.
OPEN's CEO is reshaping the business with AI tools, faster workflows, and a leaner acquisition model.
Opendoor Technologies (OPEN - Free Report) has slipped sharply again. The stock has plunged 11.4% over the past month, trailing the Zacks Internet – Software industry, the broader Zacks Computer and Technology sector and even the S&P 500. For a company in the middle of a self-declared reset, the pullback forces investors to ask whether the recent weakness represents another value trap or the early stage of a long-delayed recovery.
OPEN Stock’s 1-Month Performance
Image Source: Zacks Investment Research
The debate is more complicated this time. Opendoor is no longer selling the same turnaround story it relied on for years. Under its new CEO, Kaz Nejatian, the company has reshaped its strategy, rewritten its operating philosophy and rebuilt its product roadmap around software, automation and speed. Its third-quarter 2025 results marked the first earnings report under this new leadership and the details reveal a business trying to shed its past and move toward a more disciplined, technology-centric future.
But the stock’s renewed volatility shows investors remain unconvinced.
A Technical Pullback After a Sharp Run-Up
The chart provided shows how dramatically Opendoor shares climbed between late July and mid-October as optimism around the company’s restructuring gained momentum. The stock soared past both its 50-day and 200-day moving averages. The 50-day now sits near $7.43 while the price has dipped back to roughly $7, indicating momentum has weakened again after an overheated rally.
What stands out is that the stock still trades well above its long-term trend line. The 200-day moving average sits near $3.46, reflecting how forceful the recent recovery had been. Pullbacks are normal after such vertical rallies, especially when fundamentals remain in transition.
Image Source: Zacks Investment Research
Inside Q3: Clearing Old Inventory, Resetting the Model
Opendoor’s third-quarter 2025 performance was shaped almost entirely by decisions made under prior leadership, which had tightened spreads, slowed acquisitions and left the company selling older, lower-quality inventory. Revenue fell 34% year over year to $915 million, even as the company beat expectations thanks to deliberate efforts to clear out aging homes. Gross profit fell to $66 million, and contribution margin slipped to 2.2% from 3.8% a year earlier.
Net loss widened to $90 million, though adjusted net loss improved to $61 million. More importantly, the business entered the quarter with just 3,139 homes in inventory, almost half of the year-earlier levels. In the short term, this leaner footprint depresses revenue, but it also allows the company to rebuild its acquisition machine under the 2.0 framework.
Opendoor 2.0: A Software Company, Not a Housing Speculator
In his first month as CEO, Nejatian repeatedly emphasized that “the old Opendoor had lost faith in the power of software.” The company had slowed risk-taking so dramatically that it bought fewer homes than at any time since 2017, excluding the pandemic period. His approach is to rebuild the company with speed, automation and precision — “a founder mindset,” as he described it.
The changes rolled out in just a few weeks are substantial. The company doubled its weekly acquisition pace from mid-September to the final week of October. It launched more than a dozen new tools, including AI-powered home scoping, automated title and escrow flows, a “Buy Now” option for buyers, multilingual AI valuation agents, an end-to-end D2C seller funnel and enhancements to SEO and customer-facing workflows. Operations that once required up to 11 employees now often require just one, with AI performing the heavy lifting.
These early shifts show measurable acceleration. Home assessments that once took a day now take about 10 minutes. Weekly acquisition conversion in the new D2C funnel has jumped sixfold. The goal is to turn Opendoor into a high-velocity transaction engine rather than an asset-spread speculator.
Growth Drivers: What Could Lift Opendoor From Here
The first major growth driver is faster and higher-quality acquisitions. As spreads narrow and AI underwriting improves, more sellers enter the funnel, and fewer unexpected repair or pricing issues slow the cycle. The company’s acquisition rate almost doubled within weeks of adopting its new pricing and operational model. Management believes volume is the critical first domino, since market concentration attracts buyers and then attracts additional sellers, creating a flywheel.
The second driver is improved resale velocity and unit economics. Better home selection, shorter inspection and listing cycles, and lower operational friction support higher turns. The business’s profitability is increasingly tied to speed rather than spread, reflecting a shift toward a market-maker model.
The third driver is operating leverage, powered by AI-driven efficiencies, fewer external consultants, rationalized software spend and streamlined operations. Management expects fixed operating expenses to remain stable even as acquisitions ramp back up.
Finally, Opendoor is rebuilding its capital structure to support growth. The company retired a large share of its convertible notes, raised equity to neutralize near-term repayment risks and ended the third quarter with nearly $1 billion in unrestricted cash.
Challenges: Why the Stock Has Struggled
Despite the optimism around Opendoor 2.0, significant challenges remain. The first is macro sensitivity. Even with AI-enhanced valuation and faster workflows, Opendoor still carries home inventory on its balance sheet. Housing volatility, regional price declines or rate shocks can rapidly disrupt margins.
The second challenge is the near-term financial drag. Management acknowledged that clearing old inventory has hurt contribution margin for months and expects the fourth quarter of 2025 to deliver margins below the third-quarter level. Until new, higher-quality acquisitions cycle through resale, profitability will remain pressured.
Third, Opendoor must prove consistency. Investors have seen multiple strategic resets over the years. Even the current surge in acquisitions must be tested against seasonality, regional demand patterns and the sustainability of tighter spreads.
Finally, new product bets — mortgages, warranties, tokenization initiatives and AI-driven workflows — must eventually translate into recurring revenue rather than one-time novelty.
Shareholder-First Warrant Dividend: Alignment or Dilution Risk?
Opendoor’s announcement of a special dividend of tradable warrants is both creative and controversial. Shareholders as of Nov. 18, 2025, will receive three series of warrants, exercisable at $9, $13 and $17, designed to align upside with management’s long-term incentives. These warrants are not dilutive at issuance but will dilute equity if exercised. They also bring potential capital to the balance sheet.
The program signals confidence but also underscores the company’s need to maintain liquidity during its rebuild.
Valuation & Estimates For OPEN: Improved Outlook, but Not Cheap
Opendoor trades at 1.13X forward 12-month sales, a discount to the industry’s 4.98X but above its own three-year median of 0.21X. After the stock’s steep rally, it no longer looks deeply undervalued on a relative basis.
OPEN’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Meanwhile, earnings estimates have improved. The expected 2025 loss per share has narrowed slightly to 23 cents, and 2026 loss estimates have tightened significantly to 13 cents, reflecting meaningful year-over-year improvement, as shown below. Revenue is expected to fall in 2025 (down 18%) but rebound strongly in 2026 (up 17.1%) as the new operating model takes hold.
Image Source: Zacks Investment Research
How Opendoor’s Competitors Shape the Investment Debate
The recent pullback in Opendoor’s stock also needs to be viewed in the context of how its closest rivals are navigating the same housing and technology cycle. Zillow Group (Z - Free Report) remains the most influential competitor, and Zillow Group continues to shape digital real estate expectations through its massive traffic scale and Premier Agent network. Even though Zillow Group exited iBuying, Zillow Group still sets the pace for consumer engagement and data-driven home discovery, which pressures Opendoor to differentiate through speed and AI-powered underwriting. Offerpad Solutions Inc. (OPAD - Free Report) remains another direct peer in iBuying, and Offerpad Solutions continues to operate a leaner, more localized model that contrasts with Opendoor’s high-volume national push. Offerpad Solutions has also been tightening spreads and emphasizing operational discipline, trends that mirror Opendoor’s strategic reset.
Conclusion: Compelling Turnaround Vision, but Execution Risk Dominates
Opendoor’s recent stock slide reflects the market’s caution more than a collapse in its long-term potential. The company is undergoing one of the most aggressive resets in its history. Its new product cadence, operational speed and capital overhaul reflect real structural change, not cosmetic tweaks.
But the path ahead is still uphill. Profitability remains years away on a GAAP basis. Near-term margins will be weak. Housing volatility is an ever-present risk, and valuation is no longer deeply discounted relative to history. The combination of loss-making operations, cyclical risk and execution uncertainty keeps Opendoor at a Zacks Rank #4 (Sell).
Image: Bigstock
Opendoor Stock Tumbles 11% in a Month: Should You Buy the Weakness?
Key Takeaways
Opendoor Technologies (OPEN - Free Report) has slipped sharply again. The stock has plunged 11.4% over the past month, trailing the Zacks Internet – Software industry, the broader Zacks Computer and Technology sector and even the S&P 500. For a company in the middle of a self-declared reset, the pullback forces investors to ask whether the recent weakness represents another value trap or the early stage of a long-delayed recovery.
OPEN Stock’s 1-Month Performance
Image Source: Zacks Investment Research
The debate is more complicated this time. Opendoor is no longer selling the same turnaround story it relied on for years. Under its new CEO, Kaz Nejatian, the company has reshaped its strategy, rewritten its operating philosophy and rebuilt its product roadmap around software, automation and speed. Its third-quarter 2025 results marked the first earnings report under this new leadership and the details reveal a business trying to shed its past and move toward a more disciplined, technology-centric future.
But the stock’s renewed volatility shows investors remain unconvinced.
A Technical Pullback After a Sharp Run-Up
The chart provided shows how dramatically Opendoor shares climbed between late July and mid-October as optimism around the company’s restructuring gained momentum. The stock soared past both its 50-day and 200-day moving averages. The 50-day now sits near $7.43 while the price has dipped back to roughly $7, indicating momentum has weakened again after an overheated rally.
What stands out is that the stock still trades well above its long-term trend line. The 200-day moving average sits near $3.46, reflecting how forceful the recent recovery had been. Pullbacks are normal after such vertical rallies, especially when fundamentals remain in transition.
Image Source: Zacks Investment Research
Inside Q3: Clearing Old Inventory, Resetting the Model
Opendoor’s third-quarter 2025 performance was shaped almost entirely by decisions made under prior leadership, which had tightened spreads, slowed acquisitions and left the company selling older, lower-quality inventory. Revenue fell 34% year over year to $915 million, even as the company beat expectations thanks to deliberate efforts to clear out aging homes. Gross profit fell to $66 million, and contribution margin slipped to 2.2% from 3.8% a year earlier.
Net loss widened to $90 million, though adjusted net loss improved to $61 million. More importantly, the business entered the quarter with just 3,139 homes in inventory, almost half of the year-earlier levels. In the short term, this leaner footprint depresses revenue, but it also allows the company to rebuild its acquisition machine under the 2.0 framework.
Opendoor 2.0: A Software Company, Not a Housing Speculator
In his first month as CEO, Nejatian repeatedly emphasized that “the old Opendoor had lost faith in the power of software.” The company had slowed risk-taking so dramatically that it bought fewer homes than at any time since 2017, excluding the pandemic period. His approach is to rebuild the company with speed, automation and precision — “a founder mindset,” as he described it.
The changes rolled out in just a few weeks are substantial. The company doubled its weekly acquisition pace from mid-September to the final week of October. It launched more than a dozen new tools, including AI-powered home scoping, automated title and escrow flows, a “Buy Now” option for buyers, multilingual AI valuation agents, an end-to-end D2C seller funnel and enhancements to SEO and customer-facing workflows. Operations that once required up to 11 employees now often require just one, with AI performing the heavy lifting.
These early shifts show measurable acceleration. Home assessments that once took a day now take about 10 minutes. Weekly acquisition conversion in the new D2C funnel has jumped sixfold. The goal is to turn Opendoor into a high-velocity transaction engine rather than an asset-spread speculator.
Growth Drivers: What Could Lift Opendoor From Here
The first major growth driver is faster and higher-quality acquisitions. As spreads narrow and AI underwriting improves, more sellers enter the funnel, and fewer unexpected repair or pricing issues slow the cycle. The company’s acquisition rate almost doubled within weeks of adopting its new pricing and operational model. Management believes volume is the critical first domino, since market concentration attracts buyers and then attracts additional sellers, creating a flywheel.
The second driver is improved resale velocity and unit economics. Better home selection, shorter inspection and listing cycles, and lower operational friction support higher turns. The business’s profitability is increasingly tied to speed rather than spread, reflecting a shift toward a market-maker model.
The third driver is operating leverage, powered by AI-driven efficiencies, fewer external consultants, rationalized software spend and streamlined operations. Management expects fixed operating expenses to remain stable even as acquisitions ramp back up.
Finally, Opendoor is rebuilding its capital structure to support growth. The company retired a large share of its convertible notes, raised equity to neutralize near-term repayment risks and ended the third quarter with nearly $1 billion in unrestricted cash.
Challenges: Why the Stock Has Struggled
Despite the optimism around Opendoor 2.0, significant challenges remain. The first is macro sensitivity. Even with AI-enhanced valuation and faster workflows, Opendoor still carries home inventory on its balance sheet. Housing volatility, regional price declines or rate shocks can rapidly disrupt margins.
The second challenge is the near-term financial drag. Management acknowledged that clearing old inventory has hurt contribution margin for months and expects the fourth quarter of 2025 to deliver margins below the third-quarter level. Until new, higher-quality acquisitions cycle through resale, profitability will remain pressured.
Third, Opendoor must prove consistency. Investors have seen multiple strategic resets over the years. Even the current surge in acquisitions must be tested against seasonality, regional demand patterns and the sustainability of tighter spreads.
Finally, new product bets — mortgages, warranties, tokenization initiatives and AI-driven workflows — must eventually translate into recurring revenue rather than one-time novelty.
Shareholder-First Warrant Dividend: Alignment or Dilution Risk?
Opendoor’s announcement of a special dividend of tradable warrants is both creative and controversial. Shareholders as of Nov. 18, 2025, will receive three series of warrants, exercisable at $9, $13 and $17, designed to align upside with management’s long-term incentives. These warrants are not dilutive at issuance but will dilute equity if exercised. They also bring potential capital to the balance sheet.
The program signals confidence but also underscores the company’s need to maintain liquidity during its rebuild.
Valuation & Estimates For OPEN: Improved Outlook, but Not Cheap
Opendoor trades at 1.13X forward 12-month sales, a discount to the industry’s 4.98X but above its own three-year median of 0.21X. After the stock’s steep rally, it no longer looks deeply undervalued on a relative basis.
OPEN’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Meanwhile, earnings estimates have improved. The expected 2025 loss per share has narrowed slightly to 23 cents, and 2026 loss estimates have tightened significantly to 13 cents, reflecting meaningful year-over-year improvement, as shown below. Revenue is expected to fall in 2025 (down 18%) but rebound strongly in 2026 (up 17.1%) as the new operating model takes hold.
Image Source: Zacks Investment Research
How Opendoor’s Competitors Shape the Investment Debate
The recent pullback in Opendoor’s stock also needs to be viewed in the context of how its closest rivals are navigating the same housing and technology cycle. Zillow Group (Z - Free Report) remains the most influential competitor, and Zillow Group continues to shape digital real estate expectations through its massive traffic scale and Premier Agent network. Even though Zillow Group exited iBuying, Zillow Group still sets the pace for consumer engagement and data-driven home discovery, which pressures Opendoor to differentiate through speed and AI-powered underwriting. Offerpad Solutions Inc. (OPAD - Free Report) remains another direct peer in iBuying, and Offerpad Solutions continues to operate a leaner, more localized model that contrasts with Opendoor’s high-volume national push. Offerpad Solutions has also been tightening spreads and emphasizing operational discipline, trends that mirror Opendoor’s strategic reset.
Conclusion: Compelling Turnaround Vision, but Execution Risk Dominates
Opendoor’s recent stock slide reflects the market’s caution more than a collapse in its long-term potential. The company is undergoing one of the most aggressive resets in its history. Its new product cadence, operational speed and capital overhaul reflect real structural change, not cosmetic tweaks.
But the path ahead is still uphill. Profitability remains years away on a GAAP basis. Near-term margins will be weak. Housing volatility is an ever-present risk, and valuation is no longer deeply discounted relative to history. The combination of loss-making operations, cyclical risk and execution uncertainty keeps Opendoor at a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.