Opendoor Stock Is Now 97% Off Its Highs, But 1 Wall Street Analyst Thinks It Could Double This Year

Core Viewpoint - Opendoor Technologies has faced significant challenges over the past two years due to rising interest rates, leading to a decline in home sales and a substantial drop in stock value, which is now approximately 97% off its highs [1][2] Company Performance - Opendoor's stock trades for just over $1 per share, raising questions about whether it is a value trap or a potential investment opportunity [2] - The company has made progress in its operations, with fourth-quarter revenue increasing by 25% year over year and homes sold up by 19%, although full-year revenue and homes sold were down by 26% and 27%, respectively [6][7] - Gross margin improved from 7% to 8.4%, and the company purchased 14,684 homes, which is 3,438 more than the previous year [7] Market Context - The real estate market is cyclical and closely tied to interest rates, with a 5.5% year-over-year decline in homes sold as of February [6] - The U.S. real estate industry has a$ 1.9 trillion addressable market, but only 1% of transactions occur online, indicating significant potential for digital disruption [4] Future Outlook - Management has indicated that the microenvironment is worsening heading into 2025, with guidance for a slight revenue decline in the first quarter of 2025 and flat or slightly improved adjusted EBITDA [8][9] - Despite the challenges, analysts suggest holding Opendoor stock due to its low price-to-sales ratio of 0.16, which could lead to significant stock price increases with any positive developments [10]