Is Opendoor Stock Worth Buying After Last Week’s Surge?

Opendoor Technologies ( OPEN -13.59%), the instant home-buying platform, just delivered one of the most significant surges of the year. The stock soared following the announcement that Kaz Nejatian, Shopify's chief operating officer, will become CEO, while founders Keith Rabois and Eric Wu are returning to the board—Rabois as chairman. The news also revealed a $40 million equity injection from Khosla Ventures and Wu.

The leadership overhaul is part of a renewed focus on integrating artificial intelligence (AI) to streamline and make the home transaction process more predictable. After months of heightened retail interest and substantial short positions, the stock’s leap attracted major attention.

For shareholders, however, the real issue isn’t just whether new leadership can generate buzz, but whether the company can deliver ongoing value. With shares trading at multiyear peaks, it’s important to assess recent performance, future outlook, and the new team’s plans.

A dramatic leadership reset

The management shake-up was swift and clear. Nejatian—who brings a strong product background—outlined Opendoor’s new phase as software-centric: “With AI, we’re equipped to make [buying or selling a home] drastically easier, quicker, and more reliable,” he shared in the announcement.

Having Rabois and Wu return to the board injects founder vision at a critical juncture, while the $40 million PIPE financing offers extra resources to back the company’s ambitions. These changes sparked a significant rally, forcing some bears to cover their positions and reigniting optimism about a path to profitable expansion.

Beneath the headlines, performance had already started to improve before this week’s developments. In the second quarter of 2025, Opendoor posted approximately $1.6 billion in revenue—a modest increase from the prior year and a significant jump from Q1.

Gross profit reached $128 million, and the firm achieved positive adjusted EBITDA for the first time since 2022, at $23 million, while also shrinking its GAAP net loss to $29 million. Management also pointed to growth in its agent-driven distribution, which serves more sellers with less capital investment.

Valuation, guidance, and risks

The real debate begins with the near-term forecast. For Q3 2025, Opendoor projects revenue between $800 million and $875 million, contribution profit of $22 million to $29 million, and adjusted EBITDA between negative $28 million and negative $21 million.

This outlook suggests a return to operating losses, even as contribution profit stays positive—reminding investors that sustainable profitability is still out of reach. Inventory ended the quarter lower than last year, and home acquisitions dropped notably, reflecting a cautious approach in a volatile housing environment.

Valuation has shifted rapidly. At current levels, Opendoor’s market cap is just under $8 billion. With trailing 12-month revenue at around $5.2 billion, the price-to-sales ratio is roughly 1.5. For a marketplace enabled by software, that’s not excessive if growth persists and margins keep improving.

However, this assumes ongoing gains in contribution margin and a return to steady positive adjusted EBITDA—both of which are still goals for management. More critically, it banks on the company ultimately achieving strong GAAP profitability.

Key risks remain. First, sensitivity to macroeconomic conditions is significant: sales volumes, price gaps, and holding periods all depend on mortgage rates and local inventory. Second, guidance points to short-term operating losses, even after last quarter’s positive adjusted EBITDA. Third, the recent rally brings increased volatility; short interest is high, and retail trading has magnified daily swings. Any operational error, slow sales, or bigger discounts could quickly shrink the valuation multiple.

Still, the leadership overhaul is a pivotal event. If Nejatian’s strategic focus and the founders’ return speed up Opendoor’s evolution into an AI-driven, agent-supported platform with better unit economics, the long-term upside could be substantial. But current guidance and unpredictable earnings suggest caution is warranted.

For those following the company, the next couple of quarters will be telling: (1) watch for stable or rising contribution margins, (2) improvements in asset turnover and shorter holding times, and (3) a return to positive adjusted EBITDA without one-off boosts. If these milestones are met, today’s higher price-to-sales ratio could look justified in retrospect. Until then—and after last week’s dramatic surge—the prudent approach is to monitor Opendoor’s fundamentals closely and wait for clear evidence in its financials.