Opendoor's (OPEN 5.98%) stock hit an all-time low of $0.51 per share last May. Stubbornly high mortgage rates were throttling the online real estate company's growth, and its stock was in danger of being delisted from the Nasdaq as it stayed below the $1 threshold.
However, Opendoor's stock now trades at nearly $7 per share. That rally would have turned a $1,000 investment at its all-time low into more than $13,000 in just seven and a half months. Let's see why the bulls rushed back, and why it could soar another tenfold over the next decade.
Image source: Getty Images.
What does Opendoor do?
Opendoor is the largest instant buyer (iBuyer) of homes in America. It makes instant cash offers for homes, fixes them up, and relists them on its own marketplace. That capital-intensive business model works well when interest rates are low and the housing market is hot. Still, it becomes difficult to sustain as interest rates decline and the housing market cools off.
NASDAQ: OPEN
Key Data Points
Opendoor's growth accelerated during the post-pandemic housing boom in 2021. However, rising interest rates in 2022 and 2023 cooled the housing market, and its growth spurt came to an end. That pressure forced Opendoor's two largest competitors, Zillow (Z 5.00%) and Rocket's (RKT 2.61%) Redfin, to shut down their own iBuying platforms in 2022.
The Federal Reserve cut its benchmark rates six times in 2024 and 2025, but those rate cuts didn't immediately reduce mortgage rates. That's because mortgage rates are primarily tied to the 10-Year Treasury yield, which remains high due to concerns about inflation, a potential recession, and the issuance of additional government debt to cover fiscal deficits.
What are Opendoor's near-term challenges and catalysts?
Over the past three years, Opendoor's revenue declined, it bought fewer homes, and its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) turned negative.
|
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.
For 2025, analysts expect its revenue to decline 18% to $4.2 billion, its adjusted EBITDA margin to come in at negative 1.9%, and to slightly narrow its net loss to $297 million. That outlook might seem bleak, but a few potential catalysts are on the horizon.
Last September, Opendoor hired Kaz Nejatian, the former COO of Shopify (SHOP 2.01%), as its new CEO. Its co-founders, Keith Rabois and Eric Wu, also returned to the board. Shortly afterwards, the quantitative trading firm Jane Street disclosed a new 5.9% stake in the company. In December, it hired Lucas Matheson, the CEO of Coinbase's (COIN 1.70%) Canadian operations, as its new president and promoted Christy Schwartz, its interim CFO, to a permanent position.
That management shake-up and institutional support could drive Opendoor to explore more aggressive expansion strategies to capitalize on the housing market's recovery. It's already upgrading its AI algorithms to price properties more accurately, and it's expanding Opendoor Exclusives, its new marketplace that directly connects sellers to buyers, eliminating the need to buy, repair, and list properties on its own dime. It's also signing more listing partnerships with home builders, real estate platforms like Zillow and Redfin, and agents.
That expansion could transform Opendoor into a more diversified real estate platform, reducing its dependence on its capital-intensive iBuying business. As it scales up its newer, higher-margin businesses, its margins are expected to improve, driving it closer to its goal of achieving a breakeven adjusted net income by the end of 2026.
Why could Opendoor's stock rise tenfold over the next decade?
Analysts expect Opendoor's revenue to rise 15% to $4.5 billion in 2026 and 41% to $6.8 billion in 2027 as the Fed continues to cut rates, mortgage rates cool off, and the housing market recovers. They also expect its adjusted EBITDA to turn positive for the whole year in 2027.
With a market capitalization of $6.6 billion, Opendoor trades at just 1.5 times this year's sales. It's also still trading more than 80% below its all-time high of $35.88 from Feb. 2021.
If Opendoor matches analysts' estimates through 2027, grows its revenue at a steady CAGR of 20% over the following eight years, and trades at a more generous three times sales by 2035, its market cap could expand more than 13 times to $88 billion over the next ten years.
Opendoor's stock will remain volatile, but it could be a high-risk, high-reward play for investors who can tune out the near-term noise. If it successfully diversifies and scales up its business as the housing market heats up again, it could generate impressive multibagger gains.
