Opendoor Technologies (OPEN 8.16%) has earned a spot as a stock to watch since changing CEOs in September and launching a growth plan.
In its first earnings report since implementing this new strategy, it demonstrated progress, and the stock jumped after earnings. However, it's still 86% off its all-time highs. Is this a spectacular buying opportunity?
Image source: Getty Images.
Getting back to growth
The market had high hopes for Opendoor when it went public. As a real estate disruptor, it has an enormous opportunity to shake up a huge, largely traditional industry with its digital focus.
It would be convenient to blame an inhospitable operating environment for the company's fall, but new CEO Kaz Nejatian immediately set to work identifying how to run the business better. His four-pronged plan, announced in September, has these goals:
- Reach break-even adjusted net income by the end of the year on a forward one-year basis.
- Increase transaction velocity to drive positive unit economics.
- Transition to more direct-to-consumer relationships.
- Expand product options.
The turnaround plan shows early signs of progress. Opendoor says it's on track to achieve its goal of break-even adjusted net income by the end of the year, generating cash to cover operating expenses. However, that's a tall order, given the capital required to buy houses. Companies with this type of model typically raise debt to cover high-cost inventory. It can still become profitable, but it's not easy.
In terms of transaction velocity, which means speeding up the rate of transactions, management said that the October acquisitions cohort sold at more than twice the rate of the October 2024 cohort, with 50% already sold or under contract.
Opendoor increased acquisitions by 300% sequentially in the fourth quarter of 2025. In the last week of the quarter, it purchased 537 homes, up from 128 in the last week of the third quarter.
As for product expansion, it aims to offer more options for customers to move the needle. Its Cash Plus plan has become very popular, accounting for 35% of contracts in the last week of the quarter, up from 19% in the last week of the third quarter for a much smaller pool.
NASDAQ: OPEN
Key Data Points
Nejatian is rebuilding the company from the ground up, using artificial intelligence (AI) to run a smarter business, become more efficient, and give his team the tools and motivation to innovate and improve its systems.
Overall, the business is moving in the direction Nejatian is pushing it. Focusing on volume rather than spread, or the home's markup, is driving momentum, and giving customers greater flexibility is closing more deals. Using AI is helping it achieve profitability, but the positive results so far are very short-term and are mostly showing up in reference to the October cohort.
It's going to take more time
The market responded well to the news, but the numbers were still depressing. Year over year, nearly every metric was worse, from revenue and gross margin to homes bought and sold. Adjusted net loss improved, however, from $77 million to $62 million.
I think the company is showing signs of life, and over a long time period, it could be an exciting growth story. If you have a high appetite for risk and can afford to lose what you invest, you might want to take a small chance on Opendoor stock. But most investors should continue to wait and watch until there's greater stability and more progress.
