This makes me furious (From The Oxford Club)
Key Points
- Opendoor beat revenue expectations but posted a larger-than-expected loss, highlighting ongoing profitability challenges.
- The company’s “Opendoor 2.0” strategy focuses on faster inventory turns, AI-driven pricing, and breakeven adjusted net income by 2026.
- Institutional sentiment and sector rotation will likely determine whether OPEN stock can sustain momentum.
- Special Report: [Sponsorship-Ad-2-Format3]
Stock analysis is frequently peppered with sports metaphors, and with good reason; they fit. That’s the case with Opendoor Technologies Inc. (NASDAQ: OPEN).
The company reported its Q4 2025 earnings after the market closed, and the results were mixed. But that was enough for investors to push OPEN stock up 14% in after-hours trading.
The theme of the earnings report (cleverly marketed as an Open House) was: Opendoor 2.0 Does What It Said It Would Do — Delivering Acquisition Growth, Faster Inventory Turns, and Stronger Cohorts.
It outlined the company’s progress on a four-step plan to transform the business with an eye towards three goals:
- To reach breakeven Adjusted Net Income by the end of 2026 on a 12-month go-forward basis
- To drive positive unit economics while increasing transaction velocity
- To transition to direct-to-consumer relationships and expand its product suite
The report was encouraging, but progress is a relative term. This is still an unprofitable company that generates very little revenue.
In that vein, this report feels more like the company surviving the first quarter of a four-quarter game. You can’t win the game in the first quarter, but you can lose it. They haven’t lost, but what does winning look like?
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Mixed Earnings Won’t Move the Needle Much
On the top line, Opendoor reported revenue of $736 million, beating expectations of $591.75 million. However, adjusted earnings per share (EPS) came in worse than expected. Investors expected a negative number, but the loss was $1.26 versus an expected loss of 8 cents.
Both revenue and earnings were also sharply lower on a year-over-year (YOY) basis. As a one-off data point, that’s not devastating. The company made a change in the C-suite, and you have to allow time for a turnaround to happen. Bulls will also note that the YOY revenue miss was better than feared.
Call that a point for Opendoor.
The Business Model Has a Proven Achilles Heel
Opendoor went public in 2020, during the meme-stock craze, and the timing turned out to be a double-edged sword. The iBuyer was going to reshape the way homes were bought and sold. The company’s core value proposition is about liquidity and convenience. They make instant cash offers to homeowners who want to sell quickly without the hassle of listing, showings, and uncertain timelines. The aim is to resell swiftly, as the speed of resale drives growth.
That engine has always been powered by algorithmic pricing models to determine what to pay sellers, how to price for resale, and which markets to be active in. They may not have been using AI from the start, but they are now. In fact, part of the turnaround strategy is the use of AI to make their model more efficient.
The problem is like any AI model; the output is only as good as the historical data it’s trained on. If market conditions shift faster than the model adapts, the company can get trapped with depreciating inventory.
That happened in 2022. Rising interest rates and a rapidly cooling housing market caught the company offside with inventory bought at much higher prices. The company had to take massive losses, and the stock fell from over $12 when the year began to under a dollar at the end.
The anthem from retail investors is that “this time it’s different.” But those are dangerous words. Interest rates would have to move significantly lower to “unfreeze” the housing market, and the recent Fed minutes suggest that’s unlikely.
The point for investors is one of caution. AI can help, but it’s only as good as the underlying market. The company went public in an unprecedented bull market for housing. It survived the other side of that, but what does equilibrium look like?
That’s why they play the game. And Opendoor’s earnings have allowed it to continue playing.
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How Should Retail Investors View OPEN Stock?
To help answer that question, it’s important to note that the gains of over 200% in the last 12 months were assisted by strong institutional buying in the third and fourth quarters of last year.
However, that “stimulus” seemed to be wearing out as the year came to an end. Short interest rose, indicating that the “big money” viewed the stock as overextended. That’s remained the case in 2026, and OPEN stock was down just over 20% before the report dropped.
The takeaway is that OPEN stock will need to generate institutional buying to move higher. However, with evidence of broader sector rotation away from tech stocks, there may be less interest in a stock that delivered a good but not great report.
Opendoor is a speculative stock and a company that’s still trying to prove that its business model is viable at scale. There’s still time on the clock, but investors will need patience and conviction.
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