Opendoor downgraded at KBW on H2 losses, strategy pivot uncertainty, high valuation

[real estate concept, choose house to buy]
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Opendoor (NASDAQ:OPEN [https://seekingalpha.com/symbol/OPEN]) was downgraded at the investment bank, Keefe, Bruyette & Woods, on widening second-half losses, uncertainty from the strategy pivot, and near-historical-peak valuation.

Shares were -0.61% during morning trade to $2.46.

The stock had slid - paring its recent retail frenzy-driven rally [https://seekingalpha.com/news/4469333-opendoor-stock-adds-to-meteoric-rise-amid-retail-frenzy] - after the real estate services provider issued [https://seekingalpha.com/news/4479074-opendoor-stock-dives-after-posting-poor-q3-guidance-slight-q2-earnings-miss] below-consensus guidance for third-quarter revenue, contribution profit, and adjusted EBITDA.

On top of that, Q2 earnings came in slightly worse than expected.

"On the macro front, OPEN noted that it observed a consistent slowing of the housing market as the quarter progressed," said KBW analysts Ryan Tomasello, Bose George, and Jade Rahmani.

"While management suggested that this deterioration has stabilized somewhat post 2Q, OPEN continues to take a conservative posture with its core cash offer product with high spreads limiting the acquisition pace," added the analysts.

The Stifel-company reduced its 2025/2026 non-GAAP EPS estimates for Opendoor to -$0.27/-$0.22 from -$0.21/-$0.14. The consensus estimate [https://seekingalpha.com/symbol/OPEN/earnings/estimates] stands at -$0.33/-$0.37.

"OPEN guided 2H revenue ~40% below consensus and outlined a strategy pivot to an agent-led distribution model," said the KBW analyst note.

"While high retail interest may continue to support valuation, we downgrade the shares to Underperform from Market Perform as we expect widening losses in 2H coupled with uncertainty from the strategy pivot to weigh on the shares, which trade near the high end of historical multiples," said the research note.

The stock is up ~200% in the last one month.

"Our price target remains $1.00, equivalent to 1.4x 4Q25E BVPS (book value per share) and 1.3x 2026E gross profit," noted KBW.

Sell-side analysts [https://seekingalpha.com/symbol/OPEN/ratings/sell-side-ratings], Seeking Alpha authors [https://seekingalpha.com/symbol/OPEN/ratings/author-ratings], and the Quant Rating [https://seekingalpha.com/symbol/OPEN/ratings/quant-ratings] system see the stock as Hold.

MORE ON OPENDOOR TECHNOLOGIES

* Opendoor: Meme Mania, Platform Pivot, Valuation, And More [https://seekingalpha.com/article/4813058-opendoor-meme-mania-platform-pivot-valuation-and-more]
* Opendoor Technologies Inc. (OPEN) Q2 2025 Earnings Call Transcript [https://seekingalpha.com/article/4809290-opendoor-technologies-inc-open-q2-2025-earnings-call-transcript]
* Opendoor Technologies: An Unsteady Rate Cut Play [https://seekingalpha.com/article/4805451-opendoor-technologies-an-unsteady-rate-cut-play]
* Opendoor stock climbs again after influencer buys shares [https://seekingalpha.com/news/4484116-opendoor-stock-climbs-again-after-influencer-buys-shares]