Is Opendoor's AI-Driven Cash Offer Model Still Competitive?

Opendoor Technologies Inc.’s OPEN AI-driven cash offer model forms the foundation of its entire business operations. Cash offer is its flagship product, which is powered by the proprietary data fed into the AI, including aspects like home visits, photos, agent notes and customer interactions. As of the second quarter of 2025, one in four acquisitions was from an agent bringing in their clients for a cash offer (all-cash proposal made directly to the homebuyer).

However, given the housing market volatility, high mortgage rates and wider spreads across the market, Opendoor is not solely relying on its AI-driven cash offer model, but rather engaging in diversified product offerings to increase its competitive edge. Revolving around its cash offer model, the company is building a distributed platform, using new tools like the Key Agent iOS app and Cash Plus, to foster a more agent-led model. Once accelerated on a full scale, this distributed business model will fuel conversion levels and unlock new revenue streams.

Notably, upon piloting the agent-led model, OPEN witnessed five times more listing conversion rates, with customers reaching double the time of the final underwritten cash offer compared with its traditional flow.

Summing up, in the short term, the company will not be able to capitalize on the AI-driven cash offer model, surrounded by the agent-led model, as the full capacity of the model is yet to be realized and not before 2026. However, in the long term, the AI cash offer model will boost Opendoor’s revenue visibility and profitability, as long as it continues to broaden its toolkit surrounding this cornerstone, leading to a multi-product, agent-enabled ecosystem.

OPEN Stock’s Price Performance vs. Other Market Players

Shares of this California-based company offering a digital platform for residential real estate transactions have soared 391.6% in the past three months, significantly outperforming the Zacks Internet - Software industry, the Zacks Computer and Technology sector and the S&P 500 index.

Opendoor operates in the iBuying and digital real estate transaction space, which offers it substantial competition from key market players, including Zillow Group, Inc. ZG and Compass, Inc. COMP. In the past three months, shares of Zillow and Compass have gained 21.8% and 43.9%, respectively, indicating an underperformance compared with Opendoor.

OPEN’s Valuation Trend

OPEN stock is currently trading at a discount compared with the industry peers, with a forward 12-month price-to-sales (P/S) ratio of 0.55, as evidenced by the chart below. The discounted valuation of the stock, compared with its peers, advocates for an attractive entry point for investors.

Given the discussed market players, both Zillow and Compass are currently trading at a premium valuation compared with Opendoor, with a forward 12-month P/S ratio of 6.94 and 0.61, respectively.

Earnings Estimate Revision of Opendoor

Opendoor’s estimates of loss per share for 2025 have widened over the past 30 days to 24 cents from 21 cents. However, despite indicating a loss, the estimated figure for 2025 implies year-over-year growth of 35.1%.

OPEN stock currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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