Opendoor Technologies(NASDAQ: OPEN), the iBuying platform that makes instant cash offers on homes, just staged one of the year’s biggest moves. Shares jumped after the company named Kaz Nejatian, Shopify‘s chief operating officer, as CEO and brought back co-founders Keith Rabois and Eric Wu to the board, with Rabois taking the chairman role. The announcement also included a $40 million equity investment from Khosla Ventures and Wu.
Management tied the leadership reset to a push toward artificial intelligence (AI)-powered tools that could make buying and selling homes far simpler and more predictable. After months of retail enthusiasm and heavy short interest, the stock’s surge grabbed headlines.
The question for investors, however, isn’t whether fresh leadership can spark excitement; it’s whether the business can compound value from here. With the stock now at multiyear highs, it’s worth grounding the story in recent results, guidance, and what the new team says it will do next.
Image source: Getty Images.
The leadership changes were decisive and immediate. Nejatian — an operator with product chops — framed Opendoor’s next chapter as software-first: “With AI, we have the tools to make [buying or selling a home] radically simpler, faster, and more certain,” he said in the company’s announcement.
Co-founders Rabois and Wu rejoining the board adds founder DNA at a pivotal moment, while the $40 million private investment in public equity (PIPE) provides incremental capital to support the plan. These moves helped ignite a powerful rally and squeezed skeptics who had questioned Opendoor’s path back to profitable growth.
Under the hood, recent performance was improving before this week’s news. In the second quarter of 2025, Opendoor generated about $1.6 billion in revenue, up modestly year over year and up meaningfully from the first quarter.
Gross profit was $128 million, and the company posted its first quarter of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profitability since 2022, at $23 million, while narrowing its generally accepted accounting principles (GAAP) net loss to $29 million. Management also highlighted momentum in its agent-led distribution push as a way to serve more sellers with lighter capital needs.
The near-term outlook is where the debate begins. For the third quarter of 2025, Opendoor guided for $800 million to $875 million in revenue, contribution profit of $22 million to $29 million, and adjusted EBITDA of negative $28 million to negative $21 million.
That implies a step back into operating losses, even as contribution profit remains positive — reminding investors that the path to consistent profitability is not yet secured. Inventory also ended the second quarter lower year over year, and homes purchased declined sharply, underscoring a careful posture in a still-choppy housing market.
Valuation has reset quickly. At recent prices, Opendoor’s market capitalization sits near the high-$7 billion range. Against trailing-12-month revenue of about $5.2 billion (summing the last four reported quarters), the price-to-sales multiple is approximately 1.5. That isn’t extravagant for a software-enabled marketplace when growth is durable and margins are scaling.
But it does assume continued improvement in contribution margins and a return to sustained positive adjusted EBITDA — both of which management still needs to deliver. More importantly, it assumes the company can carve a path to substantial GAAP profitability.
There are risks to keep front and center. First, macro sensitivity remains high: Transaction volumes, pricing spreads, and holding times are all tied to mortgage rates and local supply. Second, the company’s guidance points to near-term operating losses, despite a profitable adjusted EBITDA print last quarter. Third, the rally itself introduces volatility; short interest has been elevated, and retail enthusiasm has amplified day-to-day moves. A single operational misstep, slower sell-through, or widening discount to list could compress the multiple as quickly as it expanded.
None of this diminishes the significance of the leadership reset. If Nejatian’s product playbook and the founders’ return accelerate Opendoor’s shift to an AI-powered, agent-enabled platform with healthier unit economics, the upside from here could be meaningful over a multiyear horizon. But the guide for the current quarter and the still-lumpy profitability profile argue for patience.
For investors tracking the story, one way to engage is to watch the next two quarters for (1) evidence that contribution margins stabilize or expand, (2) faster asset turns and lower days-held, and (3) a return to positive adjusted EBITDA without leaning on one-time tailwinds. If those boxes start to get checked, today’s higher price-to-sales ratio may not look expensive in hindsight. Until then — and after last week’s big move higher — the smarter move is to keep Opendoor on a tight fundamental leash and wait for proof in the numbers.
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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.
Is Opendoor Stock a Buy After Skyrocketing Last Week? was originally published by The Motley Fool
