The rally was sparked by a positive earnings report from the real estate tech platform.
Opendoor said on Aug. 11 that revenue jumped 59% in the fiscal quarter that ended in late June compared to the prior quarter. The company acquired a record 8,500 homes and ended the quarter with contracts to acquire a further 8,200 over the short term. Executives credited a favorable selling environment, but also said their direct-buy approach is resonating with today's home shoppers.
"This strong outperformance is further evidence of the seismic shift in consumer demand toward the modern real estate experience we are pioneering," CEO Eric Wu said in a press release. That experience attempts to simplify the buying and selling of a home through an online platform.
Executives lifted their outlook and now believe they will hit their 2023 annual sales goal by the end of this year. Revenue in the fiscal third quarter should land between $1.8 billion and $1.9 billion compared to $1.2 billion in the second quarter.
That news was good enough to send shares higher for the month, but the stock is still down so far in 2021. Major question marks for investors remain surrounding the timing of the company's approach to positive cash flow. It's also unclear how well the business would fare during any cyclical pullback in the real estate inventory. Those risks mean investors should be ready for more volatility in this company, which only went public in late 2020.