This Under-$10 Stock Is About to Go Parabolic
Key Points
Opendoor is now focusing on faster, AI-enabled transactions for higher-quality homes.
The company has nearly doubled weekly home acquisitions while aggressively cutting down operating costs.
The company is also targeting adjusted net income profitability by the end of 2026.
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The share price of Opendoor Technologies (NASDAQ: OPEN) is up 294% so far in 2025, and closed at $6.43 on Dec. 22. Yet, the rally may not be over, and the stock can soar higher in the coming months.
Here's why.
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New business strategy
Opendoor's business model involves purchasing houses from willing sellers and selling them to buyers at a profit. Under the new CEO, Kaz Nejatian, the company has transformed from a mere "house flipper" into a technology-driven e-commerce platform for the residential real estate market.
Image source: Getty Images.
According to the new "Opendoor 2.0" strategy, the company is replacing its previous strategy of slowly buying homes with wide spreads with high-velocity, high-quality home transactions with tighter spreads. This has helped double weekly home acquisition speed from 120 to 230 in the last seven weeks of the third quarter (ending Oct. 31, 2025). The company also reduced home assessment time with artificial intelligence (AI) technologies from close to one day to 10 minutes.
Opendoor has launched over a dozen AI-powered products, including end-to-end home scoping to determine needed repairs and automated title and escrow processes. Hence, the company's profitability will depend more on flow, speed, and tight spreads, instead of the direction of the economy.
Path to profitability
While Opendoor is still unprofitable, management expects adjusted net income profitability by the end of 2026. The company has already reduced its third-quarter adjusted operating expenses by 41% year over year to $53 million, due to disciplined cost management across all segments.
Opendoor also refinanced most of the 2030 convertible notes with equity, since it included a clause that could have forced full repayment of the principal balance during Q4 2025. The company ended the third quarter with $962 million in unrestricted cash.
CEO Kaz Nejatian also comes with an impressive track record. Previously, he helped drive Shopify to profitability after two quarters of taking charge as the COO.
Considering these tailwinds, the stock is likely to experience a parabolic rise in the coming months, although Opendoor remains exposed to housing market cyclicality and execution risks.
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Manali Pradhan, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.
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