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OPEN Resets Acquisition Spreads: Is a More Scalable Model Emerging?
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Key Takeaways
Opendoor shifts to tighter spreads and a market-maker model to drive consistency and velocity.
New AI-powered inspection tools support more uniform underwriting and healthier inventory selection.
Opendoor expects Q4 acquisitions to rise at least 35% sequentially under its redesigned framework.
Opendoor Technologies Inc. (OPEN - Free Report) is doubling down on a redesigned acquisition strategy centered on tighter spreads and higher-fidelity underwriting. In the third quarter of 2025, the company initiated a full reset of its pricing approach after concluding that wide spreads had slowed activity and increased exposure to lower-quality homes. Management noted that significant spreads attract sellers with asymmetric information and introduce unnecessary risk. As part of the reset, Opendoor is pivoting toward a market-maker model focused on consistency, velocity and standardized pricing rather than macro-driven spread expansion.
To support this transition, Opendoor rebuilt its inspection and underwriting systems around a structured “trust but verify” model. The company now uses in-app video and audio capture to generate AI-driven condition profiles, enabling more uniform and objective assessments before an offer is approved. This system is designed to minimize post-acquisition surprises, improve selection quality and ensure narrower spreads that produce a healthier and more predictable inventory mix.
Management emphasized that the redesigned framework is already reinforcing Opendoor’s disciplined execution across agent-led and direct-to-consumer funnels. With this reset underway, the company expects fourth-quarter acquisitions to increase at least 35% sequentially, reflecting higher conversion rates and more competitive pricing aligned with Opendoor’s new playbook.
The broader objective of this spread recalibration is to shift Opendoor into a more scalable operating posture— defined by consistent underwriting, predictable turnover and tighter control over asset quality. As older, legacy inventory weighed on contribution margins through October, management views the transition to newly underwritten homes as a critical step toward restoring unit economics and rebuilding momentum heading into 2026.
How OPEN Stacks Up Against Competitors
As Opendoor tightens spreads and rebuilds underwriting discipline, rivals Offerpad Solutions Inc. (OPAD - Free Report) and Zillow Group Inc. (ZG - Free Report) are leaning on operational precision and selective capital deployment to defend margins and maintain traction in a still-volatile housing environment.
Offerpad’s ability to maintain margin stability is being tested by the same soft transaction backdrop facing Opendoor. However, the company is navigating the environment by keeping inventory intentionally lean and applying strict acquisition thresholds. Management highlighted that its approach to volume is grounded in profitability, not scale, with selective home purchases, tighter underwriting and controlled turn-times all serving as key levers to protect contribution margins. Its growing mix of asset-light services, supported by AI-enabled inspection and pricing tools, further reinforces margin resilience by expanding engagement without materially increasing balance-sheet risk. These efforts illustrate how disciplined underwriting and measured acquisition pacing can help preserve unit economics even as iBuyer demand remains choppy.
Zillow’s margin profile has remained notably durable amid housing volatility, supported by a capital-light transaction ecosystem that compounds engagement through integrated tools rather than inventory exposure. The company delivered double-digit revenue growth and healthy EBITDA margins in the third quarter, with products such as Enhanced Markets, Zillow Home Loans and Showcase contributing to a higher-quality revenue mix and stronger unit profitability. Management emphasized that growth stems from ecosystem depth — reliable connections, a strong rental marketplace and consistent user experiences — rather than broad pricing adjustments. This model allows Zillow to sustain momentum even in a cautious housing environment, reinforcing the advantages of digital reliability and low capital intensity.
Shares of Opendoor have skyrocketed 254.5% in the past year compared with the industry’s growth of 2.6%.
OPEN One-Year Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, OPEN trades at a forward price-to-sales (P/S) multiple of 1.17, significantly below the industry’s average of 4.94.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for OPEN’s 2026 earnings implies a year-over-year uptick of 41.3%. Earnings per share estimates for 2026 have increased in the past 60 days.
Image: Shutterstock
OPEN Resets Acquisition Spreads: Is a More Scalable Model Emerging?
Key Takeaways
Opendoor Technologies Inc. (OPEN - Free Report) is doubling down on a redesigned acquisition strategy centered on tighter spreads and higher-fidelity underwriting. In the third quarter of 2025, the company initiated a full reset of its pricing approach after concluding that wide spreads had slowed activity and increased exposure to lower-quality homes. Management noted that significant spreads attract sellers with asymmetric information and introduce unnecessary risk. As part of the reset, Opendoor is pivoting toward a market-maker model focused on consistency, velocity and standardized pricing rather than macro-driven spread expansion.
To support this transition, Opendoor rebuilt its inspection and underwriting systems around a structured “trust but verify” model. The company now uses in-app video and audio capture to generate AI-driven condition profiles, enabling more uniform and objective assessments before an offer is approved. This system is designed to minimize post-acquisition surprises, improve selection quality and ensure narrower spreads that produce a healthier and more predictable inventory mix.
Management emphasized that the redesigned framework is already reinforcing Opendoor’s disciplined execution across agent-led and direct-to-consumer funnels. With this reset underway, the company expects fourth-quarter acquisitions to increase at least 35% sequentially, reflecting higher conversion rates and more competitive pricing aligned with Opendoor’s new playbook.
The broader objective of this spread recalibration is to shift Opendoor into a more scalable operating posture— defined by consistent underwriting, predictable turnover and tighter control over asset quality. As older, legacy inventory weighed on contribution margins through October, management views the transition to newly underwritten homes as a critical step toward restoring unit economics and rebuilding momentum heading into 2026.
How OPEN Stacks Up Against Competitors
As Opendoor tightens spreads and rebuilds underwriting discipline, rivals Offerpad Solutions Inc. (OPAD - Free Report) and Zillow Group Inc. (ZG - Free Report) are leaning on operational precision and selective capital deployment to defend margins and maintain traction in a still-volatile housing environment.
Offerpad’s ability to maintain margin stability is being tested by the same soft transaction backdrop facing Opendoor. However, the company is navigating the environment by keeping inventory intentionally lean and applying strict acquisition thresholds. Management highlighted that its approach to volume is grounded in profitability, not scale, with selective home purchases, tighter underwriting and controlled turn-times all serving as key levers to protect contribution margins. Its growing mix of asset-light services, supported by AI-enabled inspection and pricing tools, further reinforces margin resilience by expanding engagement without materially increasing balance-sheet risk. These efforts illustrate how disciplined underwriting and measured acquisition pacing can help preserve unit economics even as iBuyer demand remains choppy.
Zillow’s margin profile has remained notably durable amid housing volatility, supported by a capital-light transaction ecosystem that compounds engagement through integrated tools rather than inventory exposure. The company delivered double-digit revenue growth and healthy EBITDA margins in the third quarter, with products such as Enhanced Markets, Zillow Home Loans and Showcase contributing to a higher-quality revenue mix and stronger unit profitability. Management emphasized that growth stems from ecosystem depth — reliable connections, a strong rental marketplace and consistent user experiences — rather than broad pricing adjustments. This model allows Zillow to sustain momentum even in a cautious housing environment, reinforcing the advantages of digital reliability and low capital intensity.
OPEN’s Stock Price Performance, Valuation & Estimates
Shares of Opendoor have skyrocketed 254.5% in the past year compared with the industry’s growth of 2.6%.
OPEN One-Year Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, OPEN trades at a forward price-to-sales (P/S) multiple of 1.17, significantly below the industry’s average of 4.94.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for OPEN’s 2026 earnings implies a year-over-year uptick of 41.3%. Earnings per share estimates for 2026 have increased in the past 60 days.
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.