Opendoor (OPEN +9.58%), the leading instant buyer (iBuyer) of homes in America, saw its stock close at a record low of $0.51 per share on June 25. At the time, its stock was in danger of being delisted from the Nasdaq as stubbornly high mortgage rates throttled the housing market's recovery.
But today, Opendoor's stock trades at about $7. Let's see why it skyrocketed over the past five months, and if it might generate millionaire-maker gains over the next few years.
Image source: Getty Images.
Why did Opendoor's stock sink to an all-time low in June?
Opendoor uses its AI algorithms to make instant cash offers for homes, fixes up those properties, and relists them on its own marketplace. That business model thrives when interest rates are low and the housing market is hot. But it struggles as higher rates drive away its potential buyers and raise the costs of purchasing and renovating its properties.
In 2021, Opendoor's growth accelerated amid the post-pandemic buying frenzy in new homes. But over the following four years, its growth cooled off as rising rates forced it to buy fewer homes. Its capital-intensive business model crushed its margins, and its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) turned red.
|
Metric |
2021 |
2022 |
2023 |
2024 |
9M 2025 |
|---|---|---|---|---|---|
|
Revenue |
$8.0 billion |
$15.6 billion |
$6.9 billion |
$5.2 billion |
$3.6 billion |
|
Revenue Growth (YOY) |
211% |
94% |
(55%) |
(26%) |
(11%) |
|
Homes Bought |
36,908 |
34,962 |
11,246 |
14,684 |
6,535 |
|
Adjusted EBITDA Margin |
0.7% |
(1.1%) |
(9%) |
(2.8%) |
(1.1%) |
|
Net Loss |
($662 million) |
($1.4 billion) |
($275 million) |
($392 million) |
($204 million) |
Data source: Opendoor.
That industrywide slowdown forced Opendoor's two biggest competitors, Zillow and Rocket's Redfin, to shutter their own capital-intensive iBuying platforms in 2022. That's how Opendoor became the top iBuyer in the U.S. -- but its core market is still shrinking.
The Federal Reserve cut its benchmark rates five times in 2024 and 2025, but those long-awaited rate cuts didn't immediately reduce mortgage rates. Mortgage rates are actually more tightly tethered to the 10-Year Treasury yield, which remains stubbornly high due to concerns about sticky inflation, a potential recession, and the issuance of fresh debt to cover fiscal deficits. The Fed has also been buying up fewer mortgage-backed securities (MBS) and rolling its maturing MBS off its balance sheet.
Therefore, it's too early to expect the Fed's interest rate cuts to stabilize the housing market and Opendoor's iBuying business. That's why the company's stock sank to its all-time low in June.
NASDAQ: OPEN
Key Data Points
Why did Opendoor's stock skyrocket over the past five months?
Yet several catalysts drove its stock higher over the past five months. First, expectations for more aggressive rate cuts drove more retail investors to accumulate Opendoor's stock, even as mortgage rates stayed high. That rally, which commenced in mid-July, turned Opendoor into a meme stock, which attracted a lot more attention.
In September, Opendoor hired Kaz Nejatian, the former COO of Shopify (SHOP +2.29%), as its new CEO. Opendoor's co-founders, Keith Rabois and Eric Wu, also returned to the board. That shakeup indicated that the company was serious about stabilizing its struggling business. That same month, the trading giant Jane Street disclosed a new 5.9% stake in Opendoor. This institutional support suggested it wasn't just a meme stock that would eventually burn out.
As Opendoor waits for the housing market to recover, it's signing more listing partnerships with home builders, real estate platforms (including Zillow and Redfin), and agents to curb its dependence on its iBuying platform. It's also upgrading its own AI algorithms as it expands Opendoor Exclusives, its new marketplace. Opendoor Exclusives directly connects its sellers to buyers with its AI pricing engine, instead of buying, repairing, and listing those properties on its own dime.
These initiatives are transforming Opendoor from a pure-play iBuyer into a more diversified AI and software company that could generate higher-margin revenues. That transformation is likely attracting the attention of more AI-oriented investors and further amplifying its gains.
Lastly, Opendoor still looks undervalued. From 2024 to 2027, analysts expect its revenue to grow at a compound annual growth rate (CAGR) of 8% as its adjusted EBITDA turns positive by the final year. With an enterprise value of $6 billion, it trades at just 1.6 times next year's sales. Zillow, which has an enterprise value of $15.2 billion, trades at nearly five times next year's sales.
But is Opendoor's stock a millionaire-maker?
Opendoor isn't a high-growth stock anymore. However, it could grow at a steady rate if the housing market recovers, it broadens its ecosystem, and economies of scale kick in. If it matches analysts' expectations through 2027, grows its revenue at a CAGR of 10% through 2036, and trades at a more generous five times its forward sales by 2035, its stock could potentially grow nearly 13 times over the next 10 years. That probably wouldn't be a millionaire-maker gain on its own, but it would still easily crush the market.
