Opendoor: The 'Best-Case' Scenario Leads To Disappointment
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Julian LinInvesting Group LeaderFollow5ShareSavePlay(7min)CommentsSummaryOpendoor is downgraded to a strong sell due to stretched valuation, despite ambitious turnaround plans and potential macro tailwinds.Management targets GAAP breakeven by year-end and adjusted net income profitability by the end of 2026, focusing on a market-maker model.OPEN aims to scale to 6,000 homes purchased per quarter by Q4 2026, with contribution margins of 5–7% and reduced financing costs.Even under optimistic scenarios, OPEN trades at a premium multiple versus homebuilders, making risk/reward unattractive at current levels.I do much more than just articles at Best Of Breed Growth Stocks: Members get access to model portfolios, regular updates, a chat room, and more. Learn More » sheilasay/iStock via Getty Images Opendoor Technologies Inc. (OPEN) is rallying yet again, this time not solely due to a meme frenzy. The new incoming management team has given ambitious turnaround plans with targets for GAAP breakeven by the end ofThis article was written byJulian Lin36.94K FollowersFollowJulian Lin is a financial analyst. He finds undervalued companies with secular growth that appreciate over time. His approach is to look for companies with strong balance sheets and management teams in sectors with long growth runways. Julian is the leader of the investing group Best Of Breed Growth Stocks where he only shares positions in stocks which have a large probability of delivering large alpha relative to the S&P 500. He also combines growth-oriented principles with strict valuation hurdles to add an additional layer to the conventional margin of safety. Features include: exclusive access to Julian's highest conviction picks, full stock research reports, real-time trade alerts, macro market analysis, individual industry reports, a filtered watchlist, and community chat with access to Julian 24/7. Learn more.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.