What Happened to the Opendoor Stock Today?
- Shares of the America’s largest iBuyer, Opendoor (NASDAQ:OPEN), have been on a steady downtrend over the past few weeks.
- Since peaking in mid-February, Opendoor stock has lost about half of its value.
Why It Happened
- There are two big things driving OPEN stock lower:
- One, the market has turned its back on early-stage, pre-profit tech companies amid a rising in Treasury yield and a rebound in growth in other sectors of the economy, like energy, financials, and retail. Opendoor is an early-stage, pre-profit tech company. It has found itself on the losing side of this shift.
- Two, the housing market has remained red-hot in terms of pricing thanks to limited supply. Home prices nationally were up 11.2% in January, the biggest jump in nearly 15 years, mostly because there’s a lot more demand in the housing market right now than supply.
- In a hot housing market, Opendoor’s home selling services are less compelling, since home sellers have all the leverage with buyers.
Does It Matter?
- This selloff is a golden buying opportunity in OPEN stock.
- Treasury yields have stopped surging, as it appears the best of the economic data is now in the rear-view mirror. As we head into May, June and July, the year-over-year comps will get tougher, and the growth rates will come down, putting pressure on Treasury yields.
- Meanwhile, despite current housing market dynamics, the data show that Opendoor’s growth trajectory is actually accelerating very quickly. Of note, our checks show that Opendoor’s web and app usage has been very strong.
- According to AppAnnie, Opendoor’s app ranking in the U.S. App Store (iPhones) among Lifestyle apps has steadily increased all year long, from below 400 in January, to around 300 over the past few weeks.
- According to SimilarWeb, web traffic to Opendoor.com has continued on a healthy uptrend. January 2021 web traffic rose 48% year-over-year. February was up 65%, and March was up 57%. Total Q1 traffic rose 57%.
- SimilarWeb data also shows soaring Opendoor app download volumes and healthily rising usage.
- The housing market may also be turning a corner to help out Opendoor.
- New-home construction jumped 19% in March, while new home permits rose 30% year-over-year. As the economy gradually reopens, home builders will get back to work at a more robust pace, and the market will be flooded with new supply over the next few years. This will help balance supply-demand dynamics in the housing market, which will be a boost to Opendoor’s business.
Opendoor Stock Forecast
- Long-term, Opendoor is the future of “Amazon of Houses.”
- Why? Because the current home buying and selling process sucks, with too many middle-men profit-takers adding too much time, too much hassle and too many costs into the system. Opendoor removes all those middle men, and makes home buying and selling fast, easy and cheap.
- Our modeling suggests this a $100-plus billion company in the making, as we predict that by 2030, more than one out of every ten homes in the U.S. will be bought and/or sold through Opendoor.
- Near-term weakness in OPEN stock is a long-term opportunity.
- We expect the tide to turn on OPEN stock when the company reports Q1 earnings.
- The data say those numbers will be very good — too good for the market to ignore.
From current levels, Opendoor stock is a potential 10X investment opportunity.
That’s why OPEN stock is in our Innovation Investor portfolio — a portfolio of emerging, hypergrowth technology stocks that have 10X upside potential thanks to their capacity to fundamentally change the way we eat, communicate, work, play, shop and travel.
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On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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