OPEN Signals Sequential Revenue Drop in Q3: Can Long-Term Upside Hold?

Core Insights - Opendoor Technologies reported second-quarter 2025 revenues of $1.57 billion, a 3.7% year-over-year increase, and achieved its first positive adjusted EBITDA in three years at $23 million, reversing from a $5 million loss in the prior year [1][4] - The company anticipates a significant sequential revenue drop in the third quarter, projecting revenues between $800 million and $875 million, with an adjusted EBITDA loss forecasted between $21 million and $28 million [2][7] - Opendoor is transitioning to an agent-driven platform, which has shown promising early results, including 2x higher customer conversion to cash offers and 5x higher listing conversion rates compared to its previous model [3][4] Financial Performance - The contribution margin for Opendoor decreased to 4.4% from 6.3% year-over-year [1][7] - The stock price of Opendoor has surged 645.6% over the past three months, significantly outperforming the industry average growth of 8.9% [5] Valuation and Estimates - Opendoor's forward price-to-sales (P/S) multiple stands at 0.64X, well below the industry average of 5.68X [9] - The Zacks Consensus Estimate for Opendoor's 2025 loss per share has widened from 21 cents to 24 cents, indicating a decline in analyst sentiment [10] - Projections suggest a 35.1% rise in Opendoor's earnings for 2025, contrasting with expected declines for competitors Chegg and Exodus [13]