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Opendoor Technologies Is Down 43% in 2025. Is This a Once-in-a-Lifetime Buying Opportunity Before the Stock Goes Parabolic?

July 18, 2025
04:35 AM
5 min read
AI Enhanced
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What's particularly noteworthy is One of the hottest stocks of the COVID-19 pandemic was Opendoor nologies (OPEN 10. The real estate nology platform went public through a special purpose acquisition...

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5 min read

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real estate

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Published

July 18, 2025

04:35 AM

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The Motley Fool

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financestocksfinancialreal estatetechnologymarket cyclesseasonal analysismarket

What's particularly noteworthy is One of the hottest stocks of the COVID-19 pandemic was Opendoor nologies (OPEN 10

The real estate nology platform went public through a special purpose acquisition vehicle (SPAC) with a lot of hype around disrupting the buying and selling cess in residential real estate, in light of current trends

Meanwhile, Since then, s are down 97

In contrast, 5% from all-time highs

The stock is down 43% already in 2025

And yet, in the last month, Opendoor stock has begun a comeback and is up 60% from the lows

Does this make the fallen angel a once-in-a-lifetime buy for investors today (which is quite significant), considering recent developments

Image source: Getty Images

A new buying model Opendoor's strategy is to offer all-cash buys for people selling their s, speeding up the selling cess and skipping the traditional layers of a residential real estate transaction

Conversely, It then takes the inventory on its balance sheet and turns around and sells the to another buyer

By speeding up the cess, Opendoor is able to buy s at a slight discount to the market price and then sell them for a small fit

What the re reveals is 's known as the buying and selling spread, which is how Opendoor generates a fit on a sale transaction

Additionally, It used venture capital funding, the SPAC, and debt to fundraise for buys, scaling across many cities in the United States

Nevertheless, As it scaled, it aimed to achieve operating leverage across this small spread between its purchases and sales of s, considering recent developments

One blem remained: intelligently buying s that were not going to fall in price, amid market uncertainty

This was easier said than done

When the -buying bubble during COVID-19 burst when mortgage rates began to rise in 2022, Opendoor was left with with s that were depreciating in value on its balance sheet, leading to a weakening spread on purchases

Moreover, This leads to the conclusion that stock market reacted negatively to this downturn and hasn't recovered since

Low margins and debt financing After this rough patch, Opendoor has emerged as a much smaller company, buying less than 4,000 s every quarter but one since 2022 compared to 15,000 at the peak in the September quarter of 2021

Furthermore, Another factor that presented a headwind to transactions is the frozen housing market

Affordability is at an all-time low, which is pricing out a lot of potential buyers from making purchases

Existing sales are down to 4 million a year in the United States compared to 6 million in 2021, which is a reduction in the addressable market for Opendoor to purchase s

At the same time, If buying activity reverses, Opendoor may see a slight tailwind to its (noteworthy indeed)

Furthermore, However, this will not solve all of its issues

Moreover, Gross margins are low -- 8% in the last 12 months -- which gives Opendoor a slim spread to cover its overhead costs and generate a fit

It finances a lot of its purchases with debt, which adds interest costs that eat up a lot of its gross margins

It's no surprise then to see Opendoor with a net income of negative $368 million over the last 12 months

Moreover, The company has never generated a fit, not even during the COVID-19 pandemic boom (something worth watching), given current economic conditions

OPEN Gross fit Margin data by YCharts Should you buy Opendoor stock (an important development)

At a market cap of $656 million, Opendoor looks a potential cheap stock for a turnaround play, generating revenue of $5 billion over the last 12 months, in today's financial world

Its stock price is around $1, another variable that might lead you to think it is a cheap buy (which is quite significant)

Nevertheless, None of these factors matter

Nevertheless, Opendoor's has extremely low margins, which is why the stock is valued at such a low multiple of its trailing revenue (an important development)

Moreover, It has to finance its growth with debt, which will lead to ballooning interest expenses if it starts to aggressively purchase s again (an important development)

Nevertheless, The company has never ven it can generate a fit

At the same time, A stock that collapses 98% is not something you want to buy the dip on

Usually it collapses for a reason -- because it has a shaky model with a chance of leading to bankruptcy

Conversely, Avoid buying Opendoor stock right now, it is not a turnaround play you want in your portfolio

Nevertheless, Brett Schafer has no position in any of the stocks mentioned

This demonstrates that Motley Fool has no position in any of the stocks mentioned

Market analysis shows Motley Fool has a disclosure policy (something worth watching) (noteworthy indeed).