Will Opendoor's "Default to AI" Strategy Deliver Real Returns?

Opendoor Technologies OPEN is undergoing a fundamental reset under new CEO Kaz Nejatian, repositioning itself as a software- and AI-first company rather than a balance-sheet-heavy housing trader. The centerpiece of this transformation is a “default to AI” strategy aimed at automating pricing, inspections, acquisitions and transaction workflows to improve speed, unit economics and scalability.

Early evidence suggests meaningful operational leverage. Management highlighted that AI-driven home assessments have reduced turnaround times from nearly a day to roughly 10 minutes, while acquisition velocity has nearly doubled in recent weeks as automation replaced manual, consultant-driven processes. These gains are critical in an iBuyer model where profitability depends on transaction velocity and cost discipline rather than wide spreads or macro timing.

Financially, the strategy is paired with aggressive cost rationalization. Opendoor reduced adjusted operating expenses by more than 40% year over year in the third quarter of 2025 and is reinvesting savings into engineering and AI automation, targeting adjusted net income breakeven by the end of 2026 on a forward 12-month basis. This marks a shift toward a leaner, more variable cost structure that could amplify returns if volumes scale.

Importantly, management is aligning shareholders with this turnaround. The recently announced dividend of tradable warrants provides direct upside participation without immediate dilution, reinforcing confidence in the AI-led roadmap while strengthening balance-sheet flexibility if exercised.

Execution risk remains high, given housing cyclicality and competitive pressures. However, if Opendoor can consistently convert AI efficiency into faster turns, tighter spreads and ancillary services growth, its “default to AI” strategy has a credible path to delivering real shareholder returns.

Opendoor’s Competitive Landscape: Zillow and Offerpad

In the AI-driven residential real estate space, Zillow Group Z and Offerpad OPAD stand out as the most relevant competitors to Opendoor’s “default to AI” strategy.

Zillow has long positioned itself as a data and AI powerhouse, with its Zestimate engine and marketplace algorithms shaping pricing expectations for buyers and sellers. Zillow continues to refine AI-driven valuation, lead scoring and transaction routing, giving it a powerful data moat and broad funnel reach. However, the company has stepped back from balance-sheet-heavy iBuying, favoring platform monetization over direct execution risk.

Offerpad, by contrast, remains a pure-play iBuyer and therefore competes more directly with Opendoor. Offerpad relies heavily on automated pricing, renovation analytics and rapid resale cycles. Offerpad’s disciplined AI-supported underwriting and tighter operating model aim to generate consistency through cycles. Ultimately, Zillow and Offerpad pressure Opendoor to prove that deeper AI integration can deliver faster turns, better unit economics and sustainable profitability.

OPEN Stock’s Price Performance, Valuation & Estimates

Shares of Opendoor have skyrocketed 1067.5% in the past six months against the industry’s decline of 4.3%.

OPEN 6-Month Price Performance

From a valuation standpoint, OPEN trades at a forward price-to-sales (P/S) multiple of 1.01, significantly below the industry’s average of 4.85.

P/S (F12M)

The Zacks Consensus Estimate for OPEN’s 2026 loss per share has narrowed to 13 cents in the past 30 days, as shown below. Also, the estimated figure indicates a narrower loss from the year-ago estimated loss of 23 cents per share.

OPEN stock currently has a Zacks Rank #3 (Hold). 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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