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Opendoor Technologies (OPEN) Faces Valuation and Execution Risks, Driving BTIG’s Cautious Stance

Opendoor Technologies Inc. (NASDAQ:OPEN) is among the hottest SMID-cap stocks so far in 2025. On November 10, BTIG’s Jake Fuller maintained a Hold rating on the company’s stock without assigning a price target. His rating was driven by the company’s new management’s updated strategy, which outlined a renewed push to accelerate home purchases and expand margins.

While Fuller thinks a renewed focus has “struck a chord” with investors, he emphasized that the margin of error is very narrow, and that management’s aggressive stance without the former safeguards “would only work” with extreme precision in pricing homes and correctly timing real-estate markets. This, in the analyst’s view, “feels like a lot to take on faith” and thus he maintained his cautious stance.

STUDIO GRAND OUEST/Shutterstock.com

The analyst was also not aligned with Opendoor Technologies Inc.’s (NASDAQ:OPEN) current valuation. He stated that with his assumptions, even a return to peak 2022 volume levels at current margin goals “still only pencil us out to value for the stock in the ~$5/share range.” Moreover, he stressed that reaching today’s valuation would require either volumes well above prior peaks or a growth multiple more typical of software companies than “a low-margin, capital-intense business”.

For context, on November 6, new CEO Kaz Nejatian announced his strategy for “refounding Opendoor as a software and AI company.” He outlined a profitability roadmap which hinges on three factors: acquiring more homes to improve scale; boosting unit economics through faster resale cycles and sharper pricing; and holding fixed costs steady to unlock operating leverage. He further added:

“In my first month as CEO, we’ve made a decisive break from the past — returning to the office, eliminating reliance on consultants, and launching over a dozen AI-powered products and features that demonstrate our renewed velocity. Our business will succeed by building technology that makes selling, buying, and owning a home easier and more joyful — not from charging high spreads and hoping the macro saves us.”

Opendoor Technologies Inc. (NASDAQ:OPEN) operates a digital platform for residential real estate that simplifies the buying and selling of homes.

While we acknowledge the risk and potential of OPEN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than OPEN and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 30 Most Fantastic Stocks Every Investor Should Pay Attention To and 13 Best Stocks to Buy According to Citadel LLC.

Disclosure: None. This article is originally published at Insider Monkey.

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