Opendoor Technologies (NASDAQ:OPEN) stock had its moment in the scorching sun a few years back, peaking at around $40 per share in February 2021. Since then, however, the online home buyer and seller has seen its share price plummet back to earth, even dipping below one dollar earlier this year.
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Recently, however, the buzz is back. EMJ Capital founder Eric Jackson – who proudly trumpets his lucrative investment in Carvana a few years ago – has been posting bullish messages about OPEN on social media.
That endorsement helped reignite investor enthusiasm, with opportunistic traders jumping in and driving OPEN’s valuation up more than 580% over the past month. But with momentum this sharp, is there still time to catch a ride on this meme stock?
One investor, known by the pseudonym The Software Side of Life, urges others not to be seduced by the recent run-up.
“Even with the increased appetite among meme investors and the thrill of chasing the stock here, there remains material business risk that should not be ignored,” explains the 5-star investor.
Digging into the fundamentals, Software Side points to troubling signs beneath the surface. OPEN currently holds 7,080 homes in inventory and continues buying faster than it can sell. Yet, elevated interest rates and stubbornly high real estate prices have cooled housing demand, putting pressure on the company’s financial health.
“Revenue and margins are under pressure due to high holding costs and sluggish homebuyer demand, while inventory continues to build, increasing risk,” adds Software Side.
On top of that, the recent surge in share price raises the likelihood that Opendoor might tap the market for capital. While that could help shore up its liquidity, it would likely come at the cost of diluting current shareholders.
Even though there’s been some financial improvement – the company trimmed its EBITDA loss to $30 million in Q1 2025 from a $50 million cash burn a year earlier – the investor believes more progress is needed before the stock becomes investable.
Unsurprisingly, then, Software Side remains “bearish after parabolic move higher,” assigning OPEN a Sell rating. (To watch Software Side of Life’s track record, click here)
Meanwhile, Wall Street analysts are taking a more wait-and-see approach. With 3 Hold ratings, 1 Buy, and 1 Sell, the stock carries a consensus Hold (i.e., Neutral) rating. Still, its 12-month average price target of $0.83 suggests the Street sees a 78% downside from current levels. (See OPEN stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.