Opendoor Technologies (OPEN), the online real estate company, soared on Friday after Federal Reserve Chair Jerome Powell hinted that interest rate cuts could be on the horizon during his Jackson Hole speech. The prospect of lower borrowing costs fueled strong buying interest, sending Opendoor shares up more than 39% in Friday’s session and driving the stock to a fresh 52-week high. With this rally, Opendoor’s year-to-date performance now stands at an impressive gain of more than 200%.
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Influential Shareholders Point to Fed as Key Catalyst
High-profile investors are tying Opendoor’s surge directly to the Federal Reserve’s stance on interest rates. Shareholder Anthony “Pomp” Pompliano praised Chair Jerome Powell’s openness to additional cuts, calling it a major catalyst for the online real estate company. His endorsement has amplified retail investor enthusiasm, with many seeing lower rates as a potential tailwind for Opendoor’s housing-focused model.
Meanwhile, Eric Jackson, head of EMJ Capital and a vocal supporter of the stock, echoed this sentiment. He argued that while Opendoor already has several positives working in its favor, the possibility of future rate cuts would be “nice to have in the back pocket” as another boost to the bullish case.
Business Risks Continue to Loom
Despite its sharp rally, Opendoor still faces significant challenges. The online real estate company remains unprofitable, and its business model is highly sensitive to weakness in the housing market and the pressure of elevated mortgage rates. In its second-quarter results, Opendoor reported a loss of $0.04 per share, which was slightly wider than Wall Street’s consensus estimate of a $0.03 loss. On a positive note, revenue grew 4% year-over-year to reach $1.6 billion, coming in ahead of analysts’ expectations of $1.5 billion.
Analysts believe that the latest surge in Opendoor’s stock price appears to be fueled more by speculative momentum than by improving fundamentals.
Is OPEN Stock a Buy?
The stock of Opendoor Technologies has a consensus Moderate Sell rating among seven Wall Street analysts. Those ratings are based on one Buy, two Hold, and four Sell recommendations issued in the last three months. The average OPEN price target of $1.02 implies 79.64% downside risk from current levels.
