Last Update 03 Nov 25

Fair value Increased 8.89%

Opendoor Technologies' analyst average price target has climbed modestly from approximately $1.71 to $1.87, as analysts weigh ongoing strategic challenges and widening losses, alongside sustained retail investor interest in the shares.

Analyst Commentary

Recent analyst reports have reflected a more cautious outlook on Opendoor Technologies. The majority of commentary highlights downside risks and challenges to the company's valuation and future growth prospects. Both bullish and bearish perspectives focus on Opendoor's operational strategy and financial trajectory.

Bullish Takeaways

Sustained retail investor interest continues to provide robust support for Opendoor’s share price, helping it trade near the higher end of historical valuation multiples.
Bullish analysts note that despite ongoing strategic uncertainty, Opendoor remains a recognized leader in its market. This suggests underlying growth potential over the longer term.
Some optimism persists that recent strategic pivots could ultimately drive improved operational execution if current headwinds are managed effectively.

Bearish Takeaways

Bearish analysts have broadly expressed concern that widening losses are expected to continue into the second half of the year, placing increased pressure on earnings and cash flow.
Several recent downgrades cite uncertainty tied to Opendoor’s evolving business strategy. This could limit investor confidence and impact future performance.
Revised price targets have reflected the view that current valuation may not be justified given execution challenges, especially with shares trading at elevated multiples relative to historical norms.
Overall sentiment from recent research suggests that limited visibility into a clear path back to profitability remains a key risk for shareholders.

What's in the News

Kaz Nejatian, previously Chief Operating Officer at Shopify, has been appointed as Chief Executive Officer of Opendoor Technologies. (Key Developments)
Opendoor announced the appointment of Christy Schwartz as interim Chief Financial Officer, replacing Selim Freiha. This change will become effective on September 30, 2025. (Key Developments)
The U.S. District Court for the District of Arizona granted preliminary approval of a proposed settlement in the Gera v. Palihapitiya derivative action, requiring Opendoor to implement certain corporate governance reforms. (Key Developments)
Opendoor issued more than 6.1 million common shares in a private placement, raising approximately $41 million. The offering saw significant participation from Khosla Ventures Opportunity III, Eric Wu, and other investors. (Key Developments)
In partnership with Birdie, Opendoor launched the Opendoor Cash Registry. This initiative allows homebuyers to create cash funds for major home-related financial needs. (Key Developments)

Valuation Changes

Consensus Analyst Price Target has risen slightly, increasing from $1.71 to $1.87 per share.
Discount Rate decreased modestly from 9.60% to 9.57%, which suggests a slight reduction in perceived investment risk.
Revenue Growth estimates, while still negative, have improved from -6.76% to -6.18%.
Net Profit Margin has dipped marginally from 5.01% to 4.94%.
Future P/E ratio has increased from 8.61x to 9.32x. This indicates a higher valuation based on projected earnings.

Optimizing contribution margins and aligning with macro indicators could improve net margins and maintain healthy unit economics.
Expanding product offerings and optimizing marketing strategies could unlock new revenue streams and enhance overall earnings.
Opendoor's exposure to macroeconomic pressures, declining demand, inventory risk, and debt may constrain financial flexibility and affect long-term growth and profitability.

Catalysts

About Opendoor Technologies

Operates a digital platform for residential real estate transactions in the United States.What are the underlying business or industry changes driving this perspective?

Opendoor is optimizing its contribution margin by setting spreads according to macro indicators, which could improve net margins by reducing risks and maintaining healthy unit economics.
Enhancements in pricing models and a refined customer experience could lead to higher conversion rates, potentially increasing revenue as more sellers convert their initial engagement into completed transactions.
Aligning marketing strategies with seasonal buying patterns may improve operational efficiency and enhance revenue by acquiring homes when demand is high and spreads are favorable.
Expanding product offerings such as List with Opendoor and the Marketplace, alongside better targeting sellers outside of their buy box, could unlock new revenue streams and grow overall earnings.
Ongoing cost efficiency initiatives and operating as a leaner organization aim to improve net margins by reducing fixed costs, enhancing profitability despite macroeconomic challenges.

Opendoor Technologies Earnings and Revenue Growth

Opendoor Technologies Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Opendoor Technologies's revenue will decrease by 2.9% annually over the next 3 years.
Analysts are not forecasting that Opendoor Technologies will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Opendoor Technologies's profit margin will increase from -5.9% to the average US Real Estate industry of 5.1% in 3 years.
If Opendoor Technologies's profit margin were to converge on the industry average, you could expect earnings to reach $239.7 million (and earnings per share of $0.3) by about September 2028, up from $-305.0 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 5.1x on those 2028 earnings, up from -12.4x today. This future PE is lower than the current PE for the US Real Estate industry at 25.3x.
Analysts expect the number of shares outstanding to grow by 2.92% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 9.95%, as per the Simply Wall St company report.

Opendoor Technologies Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Opendoor faces persistent macroeconomic headwinds, such as a slower spring selling season and additional market pressures, which might impact revenues and overall financial performance.
The real estate market is experiencing a 25% decrease in clearance rates, along with increased active listings and reduced buyer visits, suggesting lower demand, potentially affecting Opendoor's future revenue streams.
The company has significant exposure to inventory risk, as indicated by a high percentage of homes being on the market for over 120 days; this could impact their earnings and contribution margins adversely.
With high levels of nonrecourse asset-backed borrowings and significant future debt obligations, Opendoor’s financial flexibility might be constrained, affecting their ability to sustain operations and profitability.
The strategies for workforce reduction and cost efficiency may impact operational capabilities, potentially limiting growth and affecting net margins and earnings in the long term.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $1.143 for Opendoor Technologies based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $2.0, and the most bearish reporting a price target of just $0.7.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $4.7 billion, earnings will come to $239.7 million, and it would be trading on a PE ratio of 5.1x, assuming you use a discount rate of 10.0%.
Given the current share price of $5.13, the analyst price target of $1.14 is 348.9% lower. Despite analysts expecting the underlying buisness to improve, they seem to believe the market's expectations are too high.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

OPEN: Widening Losses And Downgrades Will Weigh On Future Performance