Opendoor vs. Offerpad: Which iBuyer Stock Is the Better Buy Now?

Core Insights - The iBuyer model has faced significant challenges due to rising mortgage rates and housing market volatility, but signs of stabilization are prompting investors to reassess which platforms are best positioned for future growth [1][3]. Company Analysis: Opendoor Technologies (OPEN) - Opendoor is undergoing a strategic reset under new CEO Kaz Nejatian, focusing on becoming a software- and AI-driven marketplace rather than a capital-heavy model [4]. - In Q3 2025, Opendoor reported revenues of $915 million, a decline from the previous year, but maintained a gross margin of 7.2%, indicating improved pricing discipline [5]. - The company has halved its inventory year over year, reducing balance sheet risk and clearing legacy homes acquired under less favorable conditions [5]. - Opendoor's strategic opportunity lies in rapidly scaling transactions without proportional increases in fixed costs, leveraging AI for home assessments and automated workflows [6]. - The company is expanding its revenue streams through integrated services like digital checkout and buyer financing, aiming to enhance revenue per customer [7]. - A recent tradable warrant dividend aligns management's incentives with shareholder performance, reinforcing confidence in long-term execution [8]. - Despite its growth potential, Opendoor faces risks related to its larger scale, higher losses, and exposure to housing market volatility [9]. Company Analysis: Offerpad Solutions (OPAD) - Offerpad adopts a more conservative iBuyer model, focusing on capital efficiency and inventory discipline to generate steadier margins [11]. - In Q3 2025, Offerpad generated $132.7 million in revenues with a gross margin of 7%, while significantly reducing operating expenses by nearly 38% year over year [12]. - The company's strategic strength lies in its four-pillar ecosystem, which includes Cash Offer, HomePro, Renovate, and Direct+, generating higher-margin fee income [13]. - Offerpad maintains a strong liquidity position with over $75 million, allowing for flexible scaling as housing conditions improve [14]. - However, Offerpad's revenues remain below historical levels, and its smaller scale limits operating leverage compared to Opendoor [15]. Market Performance - Opendoor shares have surged 282.5% year to date, outperforming the broader market, driven by positive investor sentiment regarding its turnaround strategy [17]. - In contrast, Offerpad shares have declined 48.1% year to date, reflecting concerns about scale and long-term growth potential [18]. - On a forward 12-month price-to-sales basis, Opendoor trades at 0.96X, while Offerpad trades at a significantly lower 0.09X, indicating differing market expectations [21]. Earnings Outlook - Opendoor's loss per share estimates for 2026 have improved, with projected revenue growth of 17.1% [24]. - Offerpad's loss per share estimates for 2026 have also narrowed, with projected revenue growth of 10.9% [28]. Conclusion - Both Opendoor and Offerpad provide exposure to a recovery in U.S. housing transactions, but their risk-reward profiles differ significantly [30]. - Offerpad is positioned as a survivor with a more balanced risk-adjusted upside, while Opendoor's aggressive growth strategy carries higher execution risks [31][32].