Opendoor Technologies (OPEN) has been on a tear, with shares soaring more than 525% year-to-date as retail investors fuel a powerful rally. Several catalysts are driving the surge: an activist investor increasing their stake, a leadership change aimed at turning around the business model, and a friendlier rate environment breathing life back into the housing market. Even the likes of Warren Buffett have been seen building out their beachheads in the real estate sector.
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Separating hype from actual fundamental improvements is challenging, especially since Opendoor has never reported a profitable full fiscal year since its inception in 2014. For that reason, I see OPEN more as a trading vehicle than a long-term investment. Momentum shows no signs of cooling, particularly among retail investors, and I expect high volatility that could create trading opportunities at least until the following earnings report in early November, which may serve as the next key inflection point under the new C-suite.
Given this backdrop, a speculative Buy rating for OPEN may still be warranted, but it should ideally be paired with a hedging strategy—such as options—to mitigate downside risk.
What Essentially Moves OPEN Stock
Beyond its booming appeal to retail investors, Opendoor, as a real estate technology company, is deeply tied to mortgage financing, which is directly linked to interest rates. The company’s core model revolves around buying homes, renovating them, and reselling them.
Naturally, lower rates reduce borrowing costs, which allows Opendoor to finance homes more cheaply and expand margins. Higher rates, on the other hand, squeeze profitability by driving up financing expenses.
Take the pandemic, for example: the Fed slashed rates and continued bond purchases (quantitative easing), which pushed U.S. mortgage rates down to roughly 2.7%–3.0%. That fueled housing demand, sent prices soaring, and helped Opendoor’s revenue jump from $2.5 billion in 2020 to $15.5 billion in 2022. The stock followed suit, peaking at nearly $35 in February 2021.
However, starting in 2022, inflation accelerated, reaching ~9% in June of that year—and the Fed quickly shifted into rate-hiking mode, raising rates to 5.5% by mid-2023. As borrowing costs surged, Opendoor’s revenues collapsed from $15.5 billion in 2022 to just $5.15 billion in 2024, with steep operating losses dragging the stock down to penny-stock levels by July. Even so, shares have since bounced more than 830% from those lows.
That rebound was fueled in part by retail investors and Eric Johnson of EMJ Capital, who laid out a super-bullish case: that Fed rate cuts would reignite housing demand and Opendoor’s iBuying model—now facing limited competition—could scale profitably as volumes return. And while Opendoor posted its first positive EBITDA quarter in three years during Q2, selling 63% fewer homes year-over-year (approximately 1,700), management was quick to caution that this EBITDA trend won’t hold, given the still-weak housing backdrop.
The Fed Pulls the Trigger, But OPEN’s Catalyst Needs Time
On September 17, the Federal Reserve cut rates by 25 basis points, exactly as the market expected. In theory, this was a key catalyst for Opendoor’s bullish thesis, even if it wasn’t a surprise. The stock even spiked as much as 20% during the session ahead of the official announcement.
Still, the real focus wasn’t the cut itself, but what comes next. For the rest of 2025, six Fed officials don’t expect any more cuts, while nine others see room for two additional cuts—bringing the total to 50 bps. More importantly, the Fed shifted its attention to the job market, warning that downside risks to employment are rising. That message, coupled with a “meeting-by-meeting” approach going forward, quickly cooled market enthusiasm. OPEN still finished the day higher, but with a slightly smaller gain than its intraday peak.
Longer term, rate cuts (and the possibility of more to come) strengthen the bull case for OPEN. But in the short run, the housing market doesn’t move instantly. While lower mortgage rates immediately boost affordability, buyers usually need time to adjust plans. Historically, mortgage applications and pre-approvals pick up within 3–6 months after a 25-bp cut, while actual home sales and prices typically react over 6–12 months.
That timing lines up with what former CEO Carrie Wheeler—who stepped down in August under pressure from activist investors—warned in the Q2 shareholder letter: the back half of 2025 could remain tough, with few immediate catalysts following the “slowest spring selling season in thirteen years.”
Tracking Opendoor’s Next Move
The appointment of Kaz Nejatian, former COO of Shopify (SHOP), as Opendoor’s new CEO on September 10th was welcomed by the market, with OPEN shares hitting new highs for the year. Investors see his arrival as a signal of a strategic pivot toward a capital-light business model built on agent partnerships and recurring revenues.
While it will take time for this shift to be reflected in the numbers, the leadership change and clear direction alone have already revived momentum—especially since the old, capital-intensive model had been weighing on profitability.
More importantly, retail-driven hype fueled by rate cuts and fresh management is likely to keep bringing positive flows into the stock, supporting valuation while the new model takes shape. To put this in context, OPEN was trading at just 3.4x price-to-cash flow in mid-August but now sits at 12.5x—still 4% below the sector average.
That said, with valuations already re-rated and a blurry line between hype and fundamentals, I still think a safety net is essential for anyone betting on a turnaround. For those holding a long position, hedging with deep out-of-the-money puts is a smart way to add protection.
With the stock at $10, the idea could be buying $5.5 strike puts (roughly where shares traded in early September). This setup offers affordable protection against a major selloff while allowing me to capture the upside if momentum continues to build.
I would also suggest targeting an expiration just after the next earnings release on November 6th, since options markets are pricing in a 60.7% expected move based on the at-the-money straddle. That way, the hedge is in place for the most volatile window, when results or guidance could swing the stock dramatically.
Is OPEN Stock a Buy or Sell?
The analyst consensus on Opendoor is pretty bearish: out of nine covering the stock over the past three months, only one is a Buy, three are Holds, and five are Sells. The average price target stands at just $1.44, implying more than 85% downside from current levels over the coming year.
Riding the Hype While Hedging the Risk
Opendoor remains a highly speculative stock—far from profitability, yet riding strong bullish momentum fueled by retail enthusiasm, rate cuts, and CEO change hype. At current valuations, I see OPEN more as trading material than a long-term hold. Option chains are already flagging elevated volatility heading into earnings.
Until then, it’s hard to see much derailing short-term retail optimism, unless Q3 results in November tell a different story. For this reason, I believe a speculative Buy rating is warranted, but paired with a risk-reduction strategy to guard against sharp pullbacks until earnings are reported.