Shares of Opendoor (OPEN) dropped on Friday after the online platform for buying and selling homes reported a revenue decline in the third quarter, alongside a widening of its losses compared to the previous year.
What’s perhaps more concerning is that the management acknowledged that losses are expected to increase again in the fourth quarter. The company has issued around 181 million new shares, sparking worries about potential dilution.
Even with this recent downturn, Opendoor’s stock trades at over 10 times its price. Traction gained earlier this June was largely driven by a group of enthusiastic investors calling themselves the “Open Army.”
Is Opendoor stock worth buying today?
Underneath the disappointing headline, the company’s earnings report contained some insights that may clarify the recent drop in OPEN stock.
The San Francisco-based firm anticipates achieving profitability by the end of next year, led by its new CEO, Kaz Nejatian.
Nejatian plans to cut down on outside consultants while implementing an AI-focused operational model in hopes of reducing losses in the upcoming year.
Over time, his vision of transforming Opendoor into a more efficient marketplace for real estate could potentially elevate the company’s stock further from its current position.
Insiders continue to buy OPEN stock
For those willing to take high risks, Opendoor stock might present a good investment opportunity as we approach 2026. Insiders have shown increased investment in the Nasdaq-listed company over the last three months.
Since August, there have been three insider purchases, with no corresponding ‘sales’, indicating a strong internal belief in the company’s long-term potential. Additionally, Nejatian’s overall compensation is linked to OPEN stock performance, which hints at his strong faith in the turnaround strategy.
It’s worth noting that Opendoor Technologies is still in a nascent state and is trading significantly above the 100-day moving average (MA), suggesting that bullish sentiment persists.
Wall Street warns against open doors
Nonetheless, despite some positive indicators, Wall Street generally advises caution regarding Opendoor, mainly due to its status as a meme stock.
According to consensus evaluations, the recommendation for Opendoor stock remains a “hold,” indicating that even with the maximum price target set at $6, this could reflect a potential decline of about 6% from current prices.
