Key Stats for Opendoor Stock
- Price Change for Opendoor stock: 21.50%
- $OPEN Share Price as of Nov. 10: $7.97
- 52-Week High: $10.87
- $OPEN Stock Price Target: $1.89
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What Happened?
Opendoor (OPEN) stock surged over 21% on Monday following its Q3 results last week, a share buyback program, and an analyst upgrade.
The online real estate platform reported Q3 earnings after the close on Thursday, and new CEO Kaz Nejatian came out swinging with a complete overhaul of the company’s strategy.
The numbers weren’t pretty as revenue fell 34% year-over-year to $915 million, and homes sold dropped 29% to just 2,568 units. Gross profit came in at $66 million, indicating a 7.2% margin, while contribution profit fell to $20 million (2.2% margin).
Nejatian, who joined as CEO in mid-September after serving as Shopify’s Chief Operating Officer, laid out a radical transformation plan he’s calling “Opendoor 2.0.”
The CEO is eliminating consultants, reducing software spending, and utilizing AI to automate workflows that previously required up to 11 employees per transaction. Now, many of those processes run with just one person auditing the machine.
In his first week as CEO, Opendoor entered contracts to buy 120 homes, and by late October, that number had nearly doubled to 230 homes per week.
The company is tightening spreads, accelerating transactions, and targeting an adjusted net income breakeven by the end of 2026.
But the real kicker came with Nejatian’s announcement of a special dividend warrant for shareholders. Every shareholder will receive three series of freely tradable warrants for every 30 shares they own, with exercise prices at $9, $13, and $17.
This move directly aligns management with shareholders—and, as Nejatian put it bluntly, “it gives me just a bit of joy that this will totally ruin the night of a few short sellers.”
The company also executed a $1.2 billion registered direct equity offering to clean up its balance sheet, using proceeds to repurchase approximately $264 million of its 2030 Convertible Senior Notes.
Nejatian admitted he “despises dilution” but needed breathing room to fix the capital structure without a metaphorical gun to the company’s head.
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What the Market Is Telling Us About Opendoor Stock
Opendoor stock is rallying because investors believe the company is finally taking execution seriously.
JPMorgan analyst Dae Lee initiated coverage on Monday with an Overweight rating and an $8 price target—the highest on Wall Street.
Lee called the transformation “major” and said the residential real estate market is “ripe for disruption,” with Opendoor having the data, technology, and scale to lead it.
The analyst acknowledged near-term volatility as the company clears out legacy inventory from the previous management’s overly cautious approach.
However, Lee sees the strategy shift as necessary, as Opendoor is reducing spreads to attract more sellers, utilizing AI to expedite inspections and underwriting, and launching new products like “Opendoor Checkout,” which enables buyers to tour a home and place an offer entirely online without interacting with anyone.
Nejatian’s background at Shopify is giving investors confidence. He pointed out that when he became Shopify’s COO in late 2022, analysts predicted the company would “lose money every year through 2025.”
Instead, Shopify turned profitable two quarters later and has hit the Rule of 40 every quarter since. His playbook: create a list of high-impact projects, execute relentlessly, and cut waste everywhere else.
For Opendoor stock, that means cutting headcount from 1,407 to 1,100, eliminating over 20 software vendors, and slashing consulting fees to zero.
The real estate platform anticipates adjusted operating expenses to decrease by approximately $62 million year-over-year—a 20% reduction—while reinvesting in engineering and AI automation.
Management recently launched accountable.opendoor.com, where they’ll update weekly acquisition numbers and track progress toward profitability. Nejatian said he’s “building in the open” and wants shareholders to hold him accountable.
However, the housing market is still depressed, with inventory tight and mortgage rates elevated. Opendoor guided for fourth-quarter revenue to decline approximately 35% sequentially due to low starting inventory, and the contribution margin is expected to remain below the third quarter’s 2.2% as legacy homes continue to weigh on results.
The company expects acquisitions to grow by at least 35% sequentially in Q4, but it’ll take time to determine if the new strategy is actually effective.
Still, the market is clearly willing to give Nejatian a chance. Between the warrant dividend, aggressive cost cuts, and rapid product launches, Opendoor stock is betting on a turnaround story. Whether it pays off depends on execution—but so far, the new CEO is walking the walk.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
