Opendoor (NASDAQ:OPEN) surged higher after the iBuying company experienced an absolutely stellar second quarter. This broadly underscores the fact that OPEN stock is flawlessly executing its goal to redefine the home shopping experience.
The numbers speak for themselves.
Opendoor sold nearly 3,500 homes in the quarter, which is up 42% sequentially. As far as average sale prices on those homes, those rose 12%. Total revenues shot up 59%.
Basically, the stock is trading up roughly 25% today, because all of those numbers were much better than expected.
And not only that, Opendoor’s successful quarter proves that, in the wake of Covid-19, consumers are much more open to the idea of buying and selling homes online.
Another Market Gets Digitized
Mark our words: a majority of the home shopping process will be digitized over the next 10 years. A majority of retail shopping has been digitized over the past 10 years, and the same exact thing will happen with respect to home buying and selling.
Also worth noting is the fact that Opendoor bought nearly 8,000 homes in the second quarter. That’s a huge number, especially considering the current state of the housing market.
With sellers controlling the market, home sellers have been able to sell their homes at massive premiums due to bidding wars in the open market.
And Opendoor was able to purchase 8,000 homes — with 8,000 more under contract at the end of the quarter — over the course of three months, in that environment.
This just goes to show that consumers are clearly voting with their wallets in favor of Opendoor’s faster, more certain, more flexible home selling platform.
Not to mention, Opendoor’s margins were great in the quarter. Adjusted EBITDA margins hit 2.2%, and they were supposed to be negative.
And while some of this overperformance is due to rapid home price appreciation, a large chunk of it is due to structural cost improvements that Opendoor has executed. These improvements will stick around long after this housing boom ends.
The Bottom Line on OPEN Stock
All in all, these numbers tell us one thing — Opendoor is taking over the housing market.
Forget the near-term price action. Wall Street is notoriously short-sighted and always misses the biggest opportunities.
Just focus on the fundamentals here — Opendoor has created a faster, more flexible, more certain and ultimately better way to buy and sell homes.
This new and improved way is gaining significant traction at the moment, and it’s really only a matter of time before this company redefines the national housing market.
OPEN stock has huge upside potential from current levels.
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On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.