Opendoor Stock Is Soaring Monday: What's Going On?

Shares of Opendoor Technologies Inc. OPEN are trading higher Monday as the stock continues to ride momentum fueled by retail investor interest and broader sector movement.

What To Know: The rally in Opendoor stock comes despite an uncertain financial outlook and macroeconomic headwinds facing the housing market. The momentum appears to be fueled by retail investor interest with shares seeing abnormally high volume to start the week. Opendoor has seen 1.43 billion shares traded on Monday versus the 100-day average of 105 million, per Benzinga Pro data.

Investor enthusiasm was reignited last week after hedge fund manager Eric Jackson, who has gained attention on social media, reiterated his bullish stance on the stock. Jackson suggested that Opendoor shares could reach $40 in the near term, provided the company reports a profitable quarter and signals a path to steady-state profitability. Analysts expect Opendoor to post a loss of one cent per share on $1.5 billion in revenue when it reports second-quarter results on Aug. 5.

The speculation has also been bolstered by comparisons to Carvana. Jackson argued that Opendoor deserves a similar forward enterprise value-to-revenue multiple, forecasting $5.75 billion in revenue for next year. Jackson believes the stock should be trading at $40 right now as a result.

Despite Jackson's projections, Opendoor remains a high-risk stock with more than $3.8 billion in cumulative losses and an ongoing threat of delisting from the Nasdaq due to its low share price. A shareholder vote on a potential reverse stock split is scheduled for July 28, aimed at maintaining its exchange listing.

The surge in Opendoor shares also lifted other real estate stocks like Offerpad and Rocket Companies on Monday.

Meanwhile, broader market data on the housing sector revealed that pending home sales cancellations rose to 14.9% in June, the highest level for that month on record, according to a report from Redfin. Cancellations have been driven by buyers walking away during inspections or due to financing concerns, while sellers have been increasingly willing to negotiate to close deals. The market remains challenging, with elevated home prices, mortgage rates and economic uncertainty contributing to a slowdown in sales and new listings.

Opendoor shares are trading at 52-week highs, according to Benzinga Pro. Despite the recent surge, shares are still well off all-time highs of over $39 per share in early 2021 when the company had a market cap of approximately $22.5 billion, per CNBC. Opendoor’s market cap was $1.64 billion as of Friday’s close.

OPEN Price Action: Opendoor shares were up over 100% in afternoon trading before pulling back. The stock was up 54.2% at $3.47 at the time of publication, according to Benzinga Pro.

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