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Opendoor Applied sciences (OPEN) inventory surged 21% after JPMorgan initiated protection with an Chubby ranking and $8 worth goal.
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JPMorgan expects Opendoor quarterly dwelling acquisitions to rise at the very least 35% in This autumn and tasks breakeven by late 2026.
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Third-quarter income fell 33.5% year-over-year to $915M with gross margins shrinking to 7.2% from 11.5%.
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Opendoor Applied sciences (NASDAQ:OPEN) noticed its inventory tumble 17% final week after releasing third-quarter earnings that highlighted ongoing challenges in its iBuying enterprise. The corporate reported income of $915 million, beating estimates however down 33.5% year-over-year because it targeted on clearing legacy stock relatively than driving development.
Adjusted losses got here in at $0.12 per share, lacking the $0.07 consensus, whereas web losses widened to $90 million from $78 million a yr in the past. Gross margins shrank to 7.2% from 11.5%, reflecting strain from older, lower-quality properties. The fourth-quarter outlook added to the ache, with income anticipated to drop about 35% sequentially attributable to skinny stock after a sluggish shopping for interval. Administration pushed profitability targets to breakeven by the top of 2026, signaling an extended highway to restoration amid a technique pivot to AI and software program.
These misses and the delayed turnaround timeline crushed investor hopes that the inventory’s earlier meme-driven runup — from summer season lows close to $0.50 to a mid-September excessive of $10.87 per share may maintain. Yesterday, although, the inventory surged greater than 21% after an analyst weighed in with a bullish word concerning the firm. Does this imply the meme inventory rally is again on?
JPMorgan analyst Dae Lee kicked off protection of Opendoor with an Chubby ranking and an $8 worth goal for December 2026, sparking the sharp rebound in shares. Lee highlighted a “main transformation underway” beneath new CEO Kaz Nejatian, who’s refounding the agency as a software program and AI firm. This shift strikes away from the prior administration’s risk-averse stance, focusing as an alternative on quantity development by way of tighter pricing spreads and quicker dwelling turns.
The analyst pointed to Opendoor’s use of AI for pricing accuracy, workflow automation, and add-on providers like mortgages and warranties to spice up per-transaction margins. He expects quarterly dwelling acquisitions to rise at the very least 35% sequentially within the fourth quarter, rebuilding stock and establishing for stronger outcomes.
