The average target price of OPEN is 1.2 and suggests 53% downside potential. Usually, this means a SELL recommendation among investment firms, or a recommendation to decrease one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 2.0. This is lower than the current market price, meaning that even the most optimistic analyst does not see upside potential. On the other hand, the most pessimistic analyst has a target price of 0.7. This is equivalent to 73% downside potential in the worst case. 

Opendoor Technologies Inc. operates a digital platform for residential real estate in the United States. The company's platform enables consumers to buy and sell a home online. It also provides title insurance and escrow services. Opendoor Technologies Inc. was incorporated in 2013 and is based in Tempe, Arizona.

Opendoor Technologies Inc.

Real Estate

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

OPEN reported revenue of USD 5 125mn in the last 12 months, down 1% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 7% from FY24 to USD -0.52. Market expects EPS to reach USD -0.56 in FY25.

The stock has been growing steadily in the past six months, adding 73% in total. The stock has outperformed its global peers from the same sector and industry (as shown above), surpassing them by 71ppts in total. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -3.8% in the last 12 months, up from -4.1% in FY23. 

Historically, OPEN has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -7.2%, down from -4.7% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to -10.8% in the last 12 months, a decrease from -6.4% in FY23. The market analysts predict that RoA will be -9.6% in FY24, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to -12.9%, below the peers. The consensus estimate for FY24 for RoCE is -10.6%, again behind the peers. 

Opendoor Technologies Inc. reported a return on equity (RoE) of -45.7% in the last 12 months, down from -31.8% in FY23. The market consensus projects an RoE of -35.4% in FY24, again behind its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -1.0 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

OPEN boasts high trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity is very unstable and remains extremely favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to bleak profitability, negligible return on capital, inadequate interest coverage, and an unfavourable capital structure. We note low margin volatility, among the positive credit factors. 

In highly turbulent market conditions, OPEN is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, OPEN is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Based on key historical and expected multiples, the stock is fairly valued relative to its peers. 

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Opendoor Technologies Inc.

$ 2.54

3

Opendoor Technologies Inc.

$ 2.54

3

Risk factor

Profitability factor

Risk / Profitability

About

About

Risk factor

Profitability factor

$ 2.54

About

About

Opendoor Technologies Inc.

$ 2.54

3

Opendoor Technologies Inc.

$ 2.54

3

Risk factor

Profitability factor

Risk / Profitability

About

About

Risk factor

Profitability factor

$ 2.54

About

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