We came across a bullish paper about Opendoor Technologies Inc. (Open) on Longyield. In this article, we will summarize the Bulls' paper. As of May 7^Th.

A real estate agent outlines the city’s home portfolio.

Opendoor Technologies Inc. (Open), a pioneer in residential real estate e-commerce, reported its Q1 2025 results, a difficult housing environment defined by high mortgage rates, weak buyer demand and improved rises. Since 2014, Opendoor has restructured its strategy of stability and advantages closer to profitability. As mortgage rates approach 7%, transaction volumes slowed down, forcing companies to adapt. Opendoor's response was to increase the spread to keep margins up, even if it means fewer homes. The discipline is based on sophisticated pricing algorithms and targeted marketing to help companies adapt to seasonal and regional market conditions. Meanwhile, Opendoor is driving an agent partnership model in 11 markets, referring sellers to reviewed agents who can provide cash and traditional lists. The program aims to increase conversion rates and drive asset-based commission revenue, thereby reducing inventory risks while expanding the company’s service offerings.

This strategic evolution marks Opendoor's transition from a cash platform to a wider platform for selling options. Leadership emphasizes adaptability to earnings calls, balancing prudence and long-term optimism. Financially speaking, Q1 showed signs of resilience in 2025: revenue was steady at $1.2 billion, a sequential increase of 6%, while home acquisitions rose 4% year-on-year to 3,609. Contribution profits were $54 million (4.7% margin), a slight decrease from the previous year, but adjusted EBITDA losses narrowed from $50 million to $30 million, driven by reduced operating expenses. Fixed costs fell 33% year-on-year, up from $58 million to $39 million, reflecting the company's focus on lean operations. Opendoor is still very liquid, with $559 million in unrestricted cash and $1 billion in total capital. Its $7.9 billion non-dependence on asset-backed borrowing capabilities ($2.3 billion of them) commitments, which makes financial flexibility supported by recent renewals of new facilities operating in at least 2027.

Looking ahead, Opendoor's Q2 2025 guide reflects cautious progress. It expects revenues of $1.45 to $1.525 billion, with a positively adjusted EBITDA of $100-20 million, the first in three years. The estimated profit is US$650,000-75 million, and the stable profit margin is US$75 million. However, home acquisitions will drop to about 1,700, reflecting a larger spread and reduced marketing spending, a measure designed to protect capital but could limit first-class growth later this year. Still, the stock surge of 9.37% after Opendoor's tribute shows investors' confidence in its profitability. Analysts provide different comments: Some, like Citi, lowered their price targets due to ongoing macro headwinds, down 69% year-on-year, while others acknowledge the company’s cost discipline and strategic adaptability.