Opendoor is finally doing the boring stuff right. After years of trying to reinvent real estate without understanding it, they’ve stopped lighting money on fire and started putting up for-sale signs. The company is cutting losses, fixing operations, and leaning into referral revenue. Margins are up. Holding times are down. Interest rates are falling. The setup is clean.
They used to ignore basic real estate mechanics. No signs. No tours. No staging. Just an app and a hope. That’s changed. They’ve fired 110 internal sales reps and replaced them with local agents who actually know how to sell a house. Agents now handle tours, inspections, and referrals. Opendoor gets paid either way. If the customer sells to Opendoor, they use the agent. If they list traditionally, the agent pays Opendoor a commission. That’s free money.
Referral revenue is the core of Zillow and Redfin’s business. Opendoor is finally tapping it. They’re also cutting interest costs by not buying homes at the peak of the seasonal market. Acquisitions cratered in Q2, but that’s intentional. They’re avoiding the trap of buying high and holding through winter. Instead, they’re sending leads to agents and collecting commissions. The homes they are buying have strong margins. Even if prices drop this fall, they’ll still profit.
Q2 numbers are tracking to guidance. June sales dipped, but margins are healthy. Inventory is lean and profitable. They’re not overexposed. Q3 and Q4 should show improved profitability despite lower revenue. Marketing ramps in Q4. Acquisitions pick up. Q1 and Q2 2026 will be clean, with no drag from overpriced summer inventory.
Opendoor’s price-to-sales ratio is 0.1. Carvana trades at 5.0. Palantir is at 100. If Opendoor hits a 2.5 ratio and returns to 2022 revenue levels, that’s a 75x return. The market hates this stock. That’s the opportunity.
Bear case? It’s real. Opendoor has a history of losing money. The brand is weak. Carvana has vending machines and Super Bowl ads. Opendoor has Reddit threads of agents trashing them. Carvana also makes money on loans. Opendoor doesn’t. But Opendoor is fixing its model. They’re not trying to be clever anymore. They’re just doing the work.
Interest rates are falling. That helps housing. It lowers Opendoor’s costs and shortens holding times. Zillow is funneling offers to Opendoor. They can scale revenue by simply offering better deals. The infrastructure is in place. The funnel is live.
This is a real business now. They buy homes. They sell homes. They offer convenience. They bundle services. They collect referral fees. They’ve built pricing models for a decade. Every transaction improves the algorithm. They’re not guessing anymore.
The stock is trading under $1. It’s hated. It’s ignored. But the numbers are turning. The operations are fixed. The margins are real. The setup is asymmetric.
Disclaimer: This is not financial advice.