Wall Street has seen a lot of "doors" open in the last two years. Opendoor Technologies (OPEN 3.37%), DoorDash (DASH 3.36%), and Nextdoor Holdings (KIND 0.50%) have been trading for less than two years. Investors are seeing these doors slammed in their face these days.
Opendoor, DoorDash, and Nextdoor have seen their values plummet 83%, 67%, and 53%, respectively, since hitting all-time highs last year. The only reason Nextdoor has shed just a little more than half of its value -- the relative victor of the "door" prize -- is because it's been trading only since November. Let's take a closer look at why all three stocks are disappointing investors.
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Opendoor
Opendoor was flipping houses before it was cool for a publicly traded company to make that its business model. For this pioneer in iBuying, top-line growth is stunning. Revenue more than tripled to hit $8 billion last year. It's on a revenue run rate of $15 billion based on its last quarter. The problem is that net losses continue to widen.
Opendoor is generating a positive contribution profit, what's left from a sale after accounting for the direct selling and holding costs incurred on the properties sold in a particular period. The fear here is what happens when real estate prices are no longer skyrocketing and the flippers have a hard landing.
We're already seen one major player pull out of the iBuying market. Opendoor could also be left holding a lot of keys, as the 17,009 homes it had at the start of 2022 are a 13-fold year-over-year increase for its portfolio. With interest rates widely expected to move higher this year, it's easy to see why investors are concerned about the proptech market for players that couldn't turn a profit under the housing boom.
DoorDash
The grizzled veteran of the group, DoorDash hit the market 16 months ago with business booming as folks were ordering in from restaurants that often had shuttered dining rooms. The third-party delivery platform is still the top dog in its niche, but it's another market where profitability has been hard to come by despite the healthy industry tailwinds.
We haven't necessarily turned our back on takeout delivery apps now that restaurants are fully operational. Revenue rose a better-than-expected 34% to reach $1.3 billion in last month's quarterly report. Net losses are substantial, but they are narrowing. It's an impressive feat since DoorDash is growing largely as it rolls out new delivery categories.
The company is proving that it can be resilient coming out of the pandemic, but now the next big test will be profitability. Can it achieve positive net income on a reported basis while still keeping up the pace of aggressive promotions to stay ahead of the pack? It's a question that DoorDash will need to answer.
Nextdoor
Lastly, we have a company that's been public since going the special purpose acquisition company (SPAC) route only four months ago. Nextdoor Holdings runs a hyperlocal message board where neighbors share notices of lost pets, crimes, and gripes. There's even the occasional positive thread that lives up to its KIND ticker symbol.
Nextdoor is growing. Revenue clocked in 48% higher in its first full quarter as a public company, but we're talking about revenue of just $59.3 million. It's hard to monetize a localized community hub, so like the other two "door" stocks, Nextdoor is also deep in the red. Growth is also slowing, as its guidance for the current quarter calls for revenue to rise just 41% for the current quarter.
Nextdoor draws an audience. The 36 million weekly active users it had at the end of 2021 are a 32% improvement over the past year. But average revenue per user was just $1.65 for its latest quarter. There's only so much money to be made in helping folks find a handyman or determining whether a snake in the yard is venomous or not.
