3 market experts tell us why they're skeptical about retail traders' favorite meme stock

Core Viewpoint - The significant rise of Opendoor Technologies has captured attention in retail trading circles, with shares increasing over 1,600% since July, driven by bullish sentiment from hedge fund founder Eric Jackson [1] Group 1: Stock Performance - Opendoor's shares surged from less than $1 to a high of $10.28, marking a dramatic increase in value [1] - Jackson has set an ambitious price target of $82 per share for Opendoor, suggesting potential for substantial growth [2] Group 2: Investor Sentiment - Retail traders are enthusiastic about Opendoor, but some institutional investors express skepticism regarding Jackson's optimistic outlook [2] - William Reid Culp III, a hedge fund manager, considers Jackson's price target aggressive based on the company's current fundamentals [2] Group 3: Financial Fundamentals - Culp highlights that for Opendoor to reach the $82 target, it would need to trade at approximately 10 times its revenues, a valuation typically associated with profitable SaaS companies rather than capital-intensive housing platforms [3] - Revenue for Opendoor has declined from $15.6 billion in 2022 to an estimated $5.1 billion in 2024, with ongoing negative earnings and consensus estimates indicating continued losses per share through 2026 [3] Group 4: Market Dynamics - Culp acknowledges that retail trading momentum could lead to a rally or short squeeze, similar to past meme stocks like Gamestop or AMC, but remains doubtful that Opendoor can achieve the revenue necessary to support Jackson's price target [4] - For Opendoor to justify the $82 price point, either significant revenue growth is required or a higher valuation multiple must be assigned, which is not typical for its business model [4] Group 5: Market Position - Opendoor is identified as a breakout meme stock of the season, with retail traders actively investing in the stock [5]