TLDR
- Opendoor Technologies (NASDAQ: OPEN) shares fell 3.69% Thursday as market uncertainty returned after recent volatile trading
- Company appointed Kaz Nejatian from Shopify as new CEO while co-founders Keith Rabois and Eric Wu rejoined the board
- Khosla Ventures and Wu invested $40 million in the company as part of AI-focused strategic shift
- Q2 2025 delivered $1.6 billion revenue and first adjusted EBITDA profit since 2022, but Q3 projects return to losses
- Stock price recently surged 80% before giving back gains, leaving investors questioning the path to sustained profitability
Opendoor Technologies stock dropped 3.69% on Thursday as investors reassessed the digital real estate platform’s recent volatility. The decline followed one of the year’s most dramatic rallies triggered by major leadership changes.
The company brought in Kaz Nejatian, Shopify’s chief operating officer, as its new CEO. Co-founders Keith Rabois and Eric Wu returned to the board with Rabois assuming the chairman position.
A $40 million investment from Khosla Ventures and Wu accompanied the leadership reset. The new team is betting on artificial intelligence to transform the home buying experience.
Nejatian outlined plans to make real estate transactions simpler and faster using AI technology. The announcement initially sparked a massive rally but Thursday’s trading showed enthusiasm cooling.
The stock’s recent 80% surge reversed quickly. Investors now face questions about whether the business model can deliver consistent returns.
Recent Financial Performance Shows Mixed Results
Second quarter 2025 results painted a complicated picture. Revenue hit $1.6 billion, up from the previous quarter and slightly higher year over year.
Gross profit reached $128 million for the period. The company achieved adjusted EBITDA profitability of $23 million, its first positive quarter since 2022.
However, GAAP net losses still totaled $29 million. The gap between adjusted and actual profitability remains a concern for analysts.
Third quarter guidance reveals tougher conditions ahead. Management projects revenue between $800 million and $875 million.
While contribution profit should stay positive at $22 million to $29 million, adjusted EBITDA is expected to turn negative again. The forecast range sits between negative $28 million and negative $21 million.
Balance Sheet and Valuation Metrics
The company’s market capitalization now stands near $7 billion. Against trailing twelve-month revenue of $5.2 billion, the price-to-sales ratio calculates to approximately 1.5.
Opendoor carries a debt-to-equity ratio of 3.46, showing substantial leverage. The price-to-book ratio reached 10.84, raising overvaluation concerns among some investors.
Operating cash flow generated $823 million recently. The liquidity ratio of 4.4 suggests adequate short-term coverage despite ongoing losses.
Profit margins remain negative at 5.88% with an EBIT margin of negative 4.6%. These figures show the company still struggles to convert revenue into earnings.
Cash position improved by $492 million in the recent quarter. Management emphasized its agent-led distribution strategy to reduce capital requirements.
Inventory levels declined year over year while home purchases dropped sharply. The cautious approach reflects challenging housing market conditions tied to mortgage rates and local supply dynamics.
Short interest has been elevated, contributing to recent price volatility. Retail trading activity amplified the stock’s wild swings in both directions.
The housing market remains unpredictable, creating headwinds for transaction-based platforms. Days-held metrics and sell-through rates will determine whether the new strategy gains traction.
