It's been three weeks since I wrote about three relatively new "doors" -- DoorDash (DASH -0.61%), Opendoor Technologies (OPEN -0.23%), and Nextdoor Holdings (KIND 1.04%) -- that investors didn't want to open. The three stocks with "door" in their corporate monikers had fallen between 53% and 83% since peaking in 2021. Time has been kind since my original article.
DoorDash and Opendoor have soared 45% over the past three weeks. Nextdoor has been a relative laggard with its 15% bounce, but a double-digit gain in a handful of weeks isn't anything to scoff at. The market's finally starting to open for these three stocks that had their trading debuts in the last 16 months. Let's take a closer look at all three of these "door" prizes.
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DoorDash
The leader of restaurant takeout delivery has shifted out of reverse in a major way over the past three weeks. The market's bounce has been particularly kind to DoorDash, soaring 45% in that time.
A couple of positive developments have materialized for DoorDash. For starters, it was early to recognize that surging gas prices were going to scare away potential drivers. It introduced Gas Rewards two weeks ago, a program to help gig economy workers driving for DoorDash the ability to receive rebates and discounts based on the fuel they consume on the job. DoorDash also teamed up with BJ's Wholesale Club earlier this week, adding a new retail partner where it offers delivery of groceries and other warehouse club essentials.
DoorDash saw a spike in business in 2020 when the pandemic temporarily shuttered indoor dining rooms. DoorDash and other third-party delivery apps thrived as a convenient and safe way for folks to keep eating what their favorite eateries were serving without leaving the home. The key here is that DoorDash has built on that success. It's still growing. Revenue climbed a better-than-expected 34% to hit $1.3 billion in last month's quarterly report. It's still losing money on a reported basis, and that will likely continue for some time given aggressive promotions that competing platforms offer to keep the hungry ordering. However, an inevitable shakeout should help DoorDash on that front.
Opendoor
Flipping houses seemed like a no-brainer business until the leading real estate portal pulled out of the iBuying market in November. One less rival for Opendoor to contend with is fundamentally a good thing, but in the eyes of investors it was a knock on the niche itself. The thing is that Opendoor is still carving out a cozy living by snapping up underpriced properties, sprucing them up, and selling them at a higher price.
Revenue more than tripled to $8 billion last year, so it's not as if its initial public offering at the end of 2020 was a case of Opendoor getting out on top. It's now at a revenue run rate of $15 billion, starting this year with 17,009 homes on its books to sell. It's been quite the open house for Opendoor. The stock went public at $29 just 15 months ago, but it has closed in the single digits for more than a month.
There is hope for a comeback. BTIG analyst Jake Fuller upgraded the stock to buy from neutral earlier this month. Despite the tight housing inventory, fear of what rising rates will do to home prices, and questions about the iBuyer market in general, Fuller sees strong demand for Opendoor. His price target of $15 suggests even more upside than the 45% surge we've seen in the stock in the last three weeks.
Nextdoor
Nextdoor has had the weakest bounce with its 15% gain over the past three weeks. It's the smallest of the three "door" debutantes, hitting the market as a special purpose acquisition company (SPAC) just four months ago. You may be familiar with Nextdoor's hyperlocal message board where locals gather to share info on community happenings and drum up leads for specialist help as needed.
Revenue rose by a better-than-expected 48% higher in its latest quarter earlier this month, but it did post a bigger loss than analysts were targeting. It also boosted its full-year guidance with the report, but that was still lower than where Wall Street pros were perched.
Truist analyst Youssef Squali initiated coverage of the stock this week with a hold rating and a $7 price target. Nextdoor draws a crowd with 36 million weekly active users. Squali feels that there's room for the platform to attract more advertisers, but he feels the shares are currently fairly valued.
