Opendoor Technologies stock (NASDAQ:OPEN), which operates a digital platform for buying and selling residential real estate along with title insurance and escrow services in the United States, has fared exceedingly well over the past week. The stock rose 19% in Monday’s trading and remains up almost 60% over the past five trading sessions. So what’s fueling the rally? Opendoor has drawn renewed attention as a meme stock – a term used for stocks that surge largely due to hype on online forums and retail trading momentum, rather than on fundamentals. Moreover, the short interest stands at roughly 23% of outstanding shares, which results in sharp price spikes when trading activity intensifies. That said, shares are still down almost 90% from their SPAC-era peaks, although they have more than doubled year-to-date, underscoring how much of the surge is driven by sentiment and momentum. The rally has also been supported by a few company-specific developments. Opendoor recently announced its CEO would step down, a move investors greeted with enthusiasm, even through the rationale remains unclear. The company’s second-quarter results also modestly topped expectations, with both revenue of $63 million and EBITDA of $6 million coming in ahead of projections. related: META Stock: Path To 2x Growth
CHONGQING, CHINA – JULY 31: In this photo illustration, a person holds a smartphone displaying the logo of Opendoor Technologies Inc. (NASDAQ: OPEN), an American online real estate platform company, with the company’s initial O branding visible in the background, on July 31, 2025 in Chongqing, China. (Photo illustration by Cheng Xin/Getty Images)
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Momentum, Yes. Fundamentals, Not So Much
Opendoor stock may have momentum, but the fundamentals tell a slightly tougher story. At first glance, its Price-to-Sales multiple of 0.5x looks cheap compared to the S&P 500’s 3.2x. But this multiple may be a bit misleading, considering that Opendoor books the entire home sale price as revenue rather than the spread it actually earns. It’s also notable that its margins are razor-thin (or negative) and the business is highly sensitive to cyclical market conditions. The company’s top line has declined at an average of 24% annually over the past three years, although revenue did rebound 14% in the last 12 months to $5.2 billion and rose 3.7% year-over-year in the latest quarter. Losses also persist, with operating income standing at negative $204 million (a -3.9% margin) for the last 12 months. Opendoor carries $2.2 billion in debt, largely tied to financing its housing inventory. While this is common in the instant buying model, it is risky given the thin margins and exposure to housing market swings. The company’s current market cap is $2.8 billion and this implies Debt-to-Equity Ratio of 79.2%. That said, the cash of $789 million does provide some cushion for the stock.
While OPEN stock appears risky, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – S&P 500, Russell, and S&P midcap. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.