Opendoor (OPEN) Looks to Shed Meme Stock Reputation as CEO Resigns

Opendoor Technologies (OPEN), the online home marketplace, has recently drawn strong interest from retail investors. After bottoming at $0.51 in late June, the stock soared to $5 by late July before settling near $3.17 last week. That’s a year-to-date performance of almost 100% with further gains expected today during the U.S. trading session. Moreover, last week’s news of the company’s CEO — Carrie Wheeler — resigning has further bolstered bullish sentiment.

Outside of internal personnel changes, the stock’s recent rally was sparked by a high-profile investor making a bold bet that shares could climb above $80, fueling speculation of a potential Carvana (CVNA)-style turnaround. However, the stock also faces heavy short interest, as skeptics point to ongoing weakness in the housing market and elevated mortgage rates that continue to weigh on demand.

Although profitability has been a real challenge, recent results have been encouraging. Still, for the turnaround thesis to hold long-term, Opendoor remains heavily dependent on improvements in the macro environment—a scenario that remains uncertain. Given the high recent volatility and speculative nature of the thesis, even with some compelling fundamentals, a Hold rating on the stock seems appropriate.

Opendoor’s Disrupted Promise and Pandemic Setbacks

Opendoor is a real estate technology company that pioneered the “iBuying” model, which consists of buying homes directly from sellers, making simple repairs, and reselling them, with the goal of simplifying and digitizing the home-selling process.

This business model, initially seen as disruptive, had the potential to fundamentally change the way Americans buy and sell homes, much like e-commerce transformed retail. Between 2020 and 2021, during the pandemic, expectations were high: with enough scale and technology, the industry could shift online.

But in reality, the U.S. housing market experienced a prolonged period of weak transaction volumes, driven by high inflation and elevated interest rates—the worst possible scenario for real estate. Opendoor struggled to scale profitably and failed to expand its iBuying operations enough to operate efficiently in a high-mortgage-rate, low-affordability environment.

As a result, the stock has fallen more than 70% from its all-time high in early 2021. Bears remain active, with roughly 23.6% of Opendoor’s float currently shorted, highlighting continued skepticism about the company’s near-term prospects.

Meme-Stock Buzz and Turnaround Thesis

From GameStop (GME), AMC (AMC), Bed Bath & Beyond (BYON), and so on, the market hasn’t seen a new emerging meme stock in recent years—despite occasional resurgences like Kohl’s (KSS)—where retail investors show strong enthusiasm even when fundamentals are controversial, and high short interest creates the potential for short squeezes.

This time, Opendoor has joined the meme-stock conversation largely because of EMJ Capital investor Eric Jackson, who pitched an extremely bullish turnaround case for OPEN, suggesting it could become a 100-bagger in a few years.

In short, Jackson’s thesis—what caught the attention of retail investors—was based on four main points:

1. The Fed will eventually cut rates, and housing demand will rebound.
2. iBuying faces little competition and could generate substantial profits at scale.
3. The company has untapped AI efficiencies.
4. When the turnaround takes hold, OPEN could trade at 4–5x forward EV/revenue, with revenues potentially reaching $12 billion in the coming years. For context, in 2022—still boosted by pandemic tailwinds—OPEN generated over $15 billion, roughly three times its output over the past twelve months.

Additionally, since Carrie Wheeler became Opendoor’s CEO, the focus has been on cutting fixed costs and streamlining operations—similar to what Carvana did to survive the used-car market crisis. With leaner operations, Opendoor could become profitable in its iBuying business even amid high interest rates—a scenario that was previously unfeasible. The best part is that Opendoor’s current infrastructure is already capable of handling more transactions without major additional investments.

Of course, this turnaround thesis hinges primarily on interest rate cuts. The key asymmetry today is that Wall Street generally doesn’t expect a strong recovery in Opendoor’s volumes over the next few years. Analysts currently project annual losses per share at least until 2027, even though revenues are expected to grow 15% in 2026 and another 9% in 2027.

Recent Progress and Valuation Snapshot

Opendoor has actually shown some meaningful progress recently. In its Q2 earnings, the company posted its first positive Adjusted EBITDA since 2022, totaling $23 million. While modest, this is a strong early sign that management is executing a prudent strategy: reducing marketing spend and lowering offers to homeowners to increase the margin of safety, in response to the slowing housing market.

These actions naturally led to fewer homes purchased—only 1,700 in Q2, down 63% versus the same period last year and 51% compared to the previous quarter. Yet revenues held steady at $1.6 billion for the quarter, up 4% year-over-year and 36% quarter-over-quarter. The key takeaway here is that Opendoor is shifting toward a lower-capital, agent-led platform model, reducing reliance on buying and selling homes.

Of course, the path forward won’t be smooth. Opendoor already anticipates Q3 revenues to drop about 50% to $800–$875 million, with adjusted EBITDA turning negative again at a forecasted $28 million. But this is a natural reflection of a business reorganizing to focus on fewer home purchases amid macro headwinds and cautious consumer behavior in real estate.

Looking at valuations, even after recent stock gains, Opendoor trades at a price-to-cash flow ratio of just 3.4x—well below the industry average of 12.3x. Much of the skepticism stems from the company’s cash position: $1.31 billion in cash plus free cash flow versus $1.4 billion in net debt.

While this comes close to full coverage if the cash were used to pay down debt, there’s little margin of safety. Any deterioration in cash flow—say, in a “higher-for-longer” interest rate scenario—or a rise in the cost of capital could quickly squeeze liquidity, even though the company isn’t in immediate danger of insolvency.

Is Opendoor Technologies a Buy, Hold, or Sell?

The current analyst consensus on Opendoor is mostly negative. Of the eight analysts covering the stock over the past three months, four are bearish, three are neutral, and only one is bullish. OPEN’s average stock price target is $1.27, implying a potential downside of about 60% over the next twelve months.

See more OPEN analyst ratings

Opendoor’s Volatility Playground

Opendoor stock is suitable only for investors willing to tolerate high levels of volatility—similar to what is seen with meme stocks. While I wouldn’t necessarily classify OPEN as a meme, since the thesis does have some interesting fundamentals that could support a turnaround, the key here is that macro factors matter much more than company-specific ones.

For the thesis to play out favorably, a scenario of prolonged interest rate cuts in the coming months would likely be required. Valuations do still look extremely compressed—which is unusual for a meme stock—but I’m still hesitant to take a more bullish stance. The situation remains more speculative than factual, so for now, I’m rating OPEN stock as a Hold.