Opendoor Technologies (NASDAQ:OPEN) made its public debut in 2020 after merging with Chamath Palihapitiya’s special purpose acquisition company (SPAC), Social Capital Hedosophia II. The business combination valued Opendoor at a $4.8 billion enterprise value. Afterward, shares of OPEN stock traded as high as $39. However, SPACs in general had a rough 2021. Opendoor ended the year at $14.61, a far cry from its all-time high. Today, shares of OPEN stock are trading in the $12 range. The big question still remains: What will 2022 have in store for the company?
Opendoor operates as an online platform for buying and selling residential properties. With Opendoor, interested buyers or sellers can view or list homes from the comfort of their computer, tablet or mobile device. Furthermore, Opendoor charges a 5% commission fee for properties sold, which is 1% less than the traditional 6% fee. 1% may not seem like a lot, but it can add up to thousands of dollars when selling a home.
Users seem to like Opendoor as well. The official company website reports that nine out of 10 customers who sell to Opendoor recommend it as a viable platform. Furthermore, Real Estate Witch notes that Opendoor has an average rating of 4.3/5 based on 2,346 reviews found on Reviews.io and the Better Business Bureau.
While satisfied customers are a great signal, it doesn’t necessarily mean that the stock will perform well. Let’s take a look at how the experts on Wall Street feel about OPEN stock.
Opendoor Price Predictions: What’s Next for OPEN Stock?
- Citi has a price target of $40. Analyst Nicholas Jones believes that Opendoor’s platform provides an easy way for users to sell their home. Furthermore, Jones notes that Opendoor is still in its early stages with lots of room for growth in a large addressable market.
- Credit Suisse has a price target of $37. Analyst Yoni Yadgaran believes Opendoor provides conveniences when compared to the traditional home selling mechanism. Indeed, Opendoor provides an instant offer, expedited closing times and flexibility. The analyst’s price target was calculated based on a discounted cash-flow model. The model factored in assumptions of an 11.5% weighted average cost of capital (WACC) and a 3% terminal growth rate.
- Goldman Sachs has a price target of $21. Analyst Michael Ng notes that real estate iBuyers “make up less than 1% of home transactions today, and OPEN seeks to capture share within the $95 billion of US real estate commissions market, while generating revenue by attaching adjacent services to transactions.” Ng also indicated that Opendoor is in a good position to benefit from a real estate digital transformation. However, the analyst believes that Opendoor’s potential opportunities are already reflected in its stock price.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
