Online homebuyer Opendoor Technologies' (OPEN 0.58%) shares jumped a whopping 245% in July. After that impressive rally, the big question for the company was whether its second-quarter 2025 earnings report -- which dropped on Tuesday -- would extend the good times...or end them.
While it's not a done deal, the earnings report did contain some important clues as to whether Opendoor's rally will continue.
Here's what investors need to know.
Image source: Getty Images.
The rally was never about earnings
Practically all of Opendoor's share price gains took place over a single week in July. The catalyst seems to have been hedge fund manager Eric Jackson's July 14 announcement that his firm EMJ Capital had taken a stake in Opendoor, and that he believed "it could be a 100-bagger over the next few years."
Shares immediately skyrocketed. A week later, on July 21, the stock had notched a 265% gain and was sitting at a price of $3.20/share. But that's when the rally apparently came to an end. Over the remainder of July, the stock fell 42.7% from its July 21 peak. Not much of a "rally," really.
NASDAQ: OPEN
Key Data Points
The rally was enough, though, to put Opendoor into the latest batch of hot momentum stocks, nicknamed the "DORK" stocks. Even Opendoor CEO Carrie Wheeler felt compelled to acknowledge the company's meme-stock status on the earnings call, saying, "I want to acknowledge the great deal of interest in Opendoor lately, and that we're grateful for it."
She went on to note, "This increased visibility is an opportunity to tell our story to a broader audience. We intend to make the most of it."
So, did Opendoor's results live up to that promise?
One quarter doesn't make a trend
Opendoor's Q2 2025 earnings were a mixed bag. It sold 4,299 homes for $1.6 billion in revenue -- up 5% over the prior year's quarter -- and shrank its net loss from $92 million in Q2 2024 to $29 million in Q2 2025. The company also made a big deal out of its positive adjusted EBITDA of $23 million, which made Q2 2025 its first quarter of adjusted EBITDA profitability in three years.
However, those results come with a big asterisk. Because Q2 is traditionally the strongest quarter of the year for homebuying, Opendoor invested heavily in marketing spend in the prior two quarters to raise awareness. And while its resale volumes -- sales of homes it had already bought -- were higher during the quarter, acquisition volumes -- the homes it bought to resell later -- were 63% lower than the prior year, which likely means lower revenue in future quarters.
Sure enough, Opendoor's outlook was grim. The company forecast Q3 revenue of $800 million to $875 million -- roughly half of Q2's -- and only about 1,200 home acquisitions, compared to 1,757 in Q2. The company also forecast that its quarterly adjusted EBITDA profitability would be a one-time occurrence, predicting an adjusted EBITDA loss of between $21 million and $28 million in Q3.
More concerning was Opendoor's assessment that "the housing market has further deteriorated over the course of the last quarter" and that the company would further suffer from an unfavorable mix of "older, lower-margin homes." While Opendoor didn't provide full-year guidance, it expects that Q4 revenue "to decline sequentially at a similar level to the Q3 sequential decline," which could leave Q4 revenue at zero. In other words, Q2's performance was more of a blip than the start of a trend.
Out of rally fuel
Given Opendoor's depressing outlook, it's not hard to see why the stock is down more than 20% since its earnings report. However, the company's shares are still up more than 200% since the beginning of July.
For shares to push higher, fueling the rally further, the company would either need to make some sort of blockbuster announcement -- which seems unlikely given its dreary projections -- or an external push like the one from Eric Jackson that started the rally in the first place. However, with shares already up 200% from Jackson's baseline, the "check out this way undervalued stock!" ship may have sailed.
Given Opendoor's meme-stock status, it's subject to major unpredictable price swings. While I wouldn't rule out another potential price surge -- perhaps driven by a short squeeze -- all evidence indicates that the July Opendoor stock rally has come to an end.
