OPEN Stock Soars 171% in a Month: Time to Cash Out or Stay In?

Shares of Opendoor Technologies Inc. (OPEN) have skyrocketed 171% in the past month, compared with the industry and the S&P 500’s rallies of 0.8% and 2.5%. On Monday, the stock closed at $6.04, below its 52-week high of $7.32 but well above its 52-week low of 51 cents.

Price Performance

Opendoor’s ongoing transformation into a distributed platform bodes well. By expanding beyond its flagship cash-offer model and working more closely with real estate agents, the company is creating capital-light revenue streams. Early results from this shift are encouraging, with listing conversion rates climbing fivefold and more sellers reaching final cash offers.

The launch of products like Cash Plus, which provides sellers with upfront liquidity with the potential for additional proceeds at resale, adds a differentiated option that balances customer value with reduced capital risk.

Opendoor has also been investing in tools to strengthen its ecosystem. The Key Agent iOS app allows agents to conduct high-quality in-home assessments, feeding valuable data into the company’s AI models while improving customer trust. Combined with a Net Promoter Score near 80, these initiatives point to strong customer satisfaction and brand momentum in a traditionally stressful part of the housing market.

Factors That May Halt the Rally

Opendoor operates in a highly competitive digital housing landscape, wherein Zillow Group, Inc. (ZG), Offerpad Solutions, Inc. (OPAD) and Rocket Companies, Inc. (RKT) are emerging as strong rivals leveraging their distributed operating platforms.

The U.S. housing market continues to grapple with high mortgage rates and subdued buyer demand, which have translated into weaker transaction volumes and record delistings. Opendoor’s contribution margin declined to 4.4% in second-quarter 2025 from 6.3% a year ago, pressured by older inventory and wider spreads used to hedge against market risks.

Owing to the market challenges, Opendoor has laid out a cautious third-quarter 2025 outlook, inducing bearish sentiments among investors and analysts. In the third quarter, it expects revenues between $800 million and $875 million, suggesting a decline from the $1.4 billion reported in the year-ago quarter. The outlook for the contribution profit of $22-$29 million indicates a year-over-year decline between 57.7% and 44.2%.

Another area of concern is Opendoor’s reliance on inventory quality and acquisition pacing. With fewer homes being purchased due to cautious underwriting and weaker demand, the company is left with an unfavorable mix of older, lower-margin properties that drag on profitability.

Earnings Estimate Revision

Opendoor’s bottom-line estimates for both 2025 and 2026 indicate a loss per share. Over the past 60 days, the estimate for 2025 has widened to 24 cents per share from 21 cents, while the same for 2026 has contracted to 26 cents from 27 cents.

OPEN’s Valuation Trend

Opendoor’s stock is currently trading at a discount compared with the industry peers, with a forward 12-month price-to-sales (P/S) ratio of 0.87, as evidenced by the chart below.

P/S (F12M)

Wrapping Up

Investors may want to avoid Opendoor despite its recent rally, as the company’s fundamentals remain clouded by persistent housing market challenges, declining profitability and execution risks tied to its ongoing business transformation.

While management is making strides with new products and agent-driven initiatives, these efforts are unlikely to offset near-term pressures from weak buyer demand, slower transaction volumes and an unfavorable inventory mix. Competitive threats from established digital housing players weigh on growth prospects, while widening losses and cautious outlooks suggest that the stock’s momentum may not be sustainable. OPEN currently has 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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