NEW YORK, July 20, 2026, 1:05 p.m. EDT — U.S. markets begin trading.
- Opendoor stock hovered close to $4.50, having reached as low as $4.31 earlier.
- Initial estimates indicate a 14% quarter-over-quarter decrease in Opendoor’s cost bridge.
- With mortgage rates close to 6.6%, there is added pressure ahead of the August 4 results.
Opendoor Technologies Inc. NASDAQ:OPEN hovered close to $4.50 in early-afternoon trade on delay. Shares rebounded after slipping to an intraday bottom of $4.31.
The main concern lies within the August 4 earnings report. Executives are aiming for improved margins and a more efficient cost structure.
An initial bridge following those guideposts appears as follows:
| $ millions, except margins | Q1 results | Q2 initial estimate |
|---|---|---|
| Revenue | $720 | $900 |
| Contribution margin | 4.4% | 6.0% |
| Contribution profit | $32 | $54 |
| Adjusted EBITDA | $(31) | Approximately $0 |
| Contribution-profit-to-EBITDA bridge | $63 | $54 |
| Sequential bridge change | — | 14% lower |
The estimate is based on a 25% quarter-on-quarter increase in revenue and a contribution margin of 6%. Executives forecast break-even adjusted EBITDA, with potential variation of several million dollars.
The $9 million bridge cut represents the underlying challenge. Revenue gains by themselves would not achieve the pledged breakeven quarter.
On Monday, Opendoor’s market capitalization stood at approximately $4.32 billion, around 20 times its estimated annualized preliminary contribution profit.
The multiple does not represent a typical valuation metric. Contribution profit is a non-GAAP figure and comes before certain corporate expenses.
Housing conditions continue to be challenging. As of Monday, Bankrate reported the national average 30-year mortgage rate at 6.61%. The yield on the 10-year Treasury hovered around 4.60%.
At the same time, housing stocks fell. Zillow Group Inc. NASDAQ:Z lost 2.1%, and Offerpad Solutions Inc. NYSE:OPAD was down roughly 1.0%.
Opendoor posted a 38% year-on-year decline in first-quarter revenue. Gross margin, however, rose to 10.0% compared to 8.6%.
The company reported selling 1,921 homes and acquiring 2,474. Inventory totaled 3,420 homes, representing less than half the amount from a year ago.
The proportion of homes listed for over 120 days dropped to 10%, compared with 33% in the previous quarter.
Chief Executive Kaz Nejatian said in May, “Better acquisitions, faster turns, stronger margins. The machine is working.” SEC
Opendoor’s cash position is robust, yet cash outflows continue as inventory expands. As of March, the company reported $999 million in unrestricted cash and $1.14 billion in property inventory.
Operating cash outflow totaled $246 million for the first quarter, largely due to a $221 million rise in inventory.
The stock continues to experience significant volatility. Monday’s closing price was still roughly 59% under its 52-week peak of $10.87.
Opendoor is scheduled to release its results following the close on August 4. The company’s management will hold a webcast at 5 p.m. EDT.
Mortgage rates, potential inaccuracies in home prices, and inventory financing continue to be primary risks. Accelerated buying may boost revenue but would also raise cash consumption and increase exposure to resale risk.
Investors will be looking for two key outcomes in the next report. Opendoor needs to achieve its stated margin goals and reduce the implied cost gap. If either is missed, even a revenue beat could leave the $4.50 valuation at risk.
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