Here's How Opendoor's New CEO Plans to 10X the Business

To call Opendoor Technologies' (NASDAQ: OPEN) stock performance in 2025 strong would be an understatement. The stock bottomed at less than $0.60 per share over the summer, and things were going so poorly that management had started to plan for a reverse split.

However, hedge fund manager Eric Jackson called Opendoor his next 100x investment, spelling out a detailed investment thesis that involved leveraging Opendoor's data to create artificial intelligence (AI)-powered tools, in addition to being the last major iBuying platform standing. Even after a recent pullback, Opendoor is up by more than 10x already from its lows.

Shortly after Jackson presented his thesis, Opendoor announced a major leadership change, hiring former Shopify Chief Operating Officer Kaz Nejatian as its new CEO. Nejatian's vision for the company is generally aligned with Jackson's thesis, and he has some ambitious plans to revitalize and scale the business, which he discussed in the real estate platform's recent earnings report.

Image source: Getty Images.

Nejatian's vision for the future

Nejatian has only been CEO for about two months but has already been hard at work. Since he took the helm, Opendoor has implemented significant changes within its business, including the development of more than a dozen AI products and tools.

iBuying essentially means buying a home directly from a seller, making some cosmetic improvements, and selling it directly to a buyer. The idea is that iBuying eliminates most of the key pain points involved with buying and selling a home. The approach to iBuying that has generally been used so far is "charging high spreads and hoping the macro saves us," as Nejatian puts it. In other words, iBuying needs to charge high fees to home-sellers, and also needs a strong real estate market to be profitable on a scale, and things can go very wrong if the economy isn't cooperative. And he's right -- this is essentially why Zillow Group and Redfin both got shaken out of the iBuying business when the market slowed in 2022 and 2023.

Instead, Nejatian wants to focus on building the technology that makes buying and selling a home easier. And aside from building AI software products, which is definitely a part of the plan, he aims to aggressively control expenses, increase the volume of homes Opendoor buys, and leverage technology to do a better job of pricing homes.

Nejatian has already increased volume, nearly doubling the number of homes Opendoor agrees to buy from mid-September to the end of October. Now, he aims to decrease the average time on the market, which increases profitability by lowering holding costs. Perhaps most ambitiously, Nejatian plans to hold operating expenses steady as the business ramps up volume, by relying more on automation and standardization of processes.

How is Opendoor's business doing?

Future plans are certainly important to know, but it's also crucial to understand the business's current performance. And the short version is "not too great."

In the third quarter, Opendoor sold 2,568 homes, 29% fewer than in the third quarter of 2024. It purchased 1,169 homes, roughly one-third of what it bought in the same period last year. And on the bottom line, Opendoor posted an adjusted EBITDA margin of negative 3.6%, 80 basis points worse year over year.

Ambitious plans, but a lot to prove

The past few years of a sluggish real estate market have shown that the iBuying model that has been used throughout the industry so far could certainly use an overhaul. While Najatian's plans sound solid in principle, there's a lot that will need to go well for the business to be net profitable, which he aims to achieve by the end of 2026.

The process of buying and selling real estate in the United States is clunky and nerve-racking at best. So, there's room for a better way. But for now, it remains to be seen whether Najatian is the one who can finally deliver a sustainable iBuying model.

Matt Frankel, CFP has positions in Shopify and has the following options: short January 2027 $170 calls on Shopify. The Motley Fool has positions in and recommends Shopify and Zillow Group. The Motley Fool has a disclosure policy.