QS Research · Michael Burry's Scion Capital analyst template · 2006
Opendoor Technologies Inc. (OPEN)
As of 2026-11-09 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case +1% · downside -23% · upside +88%
At $1.40 the given market cap is $1.30B and EV/Sales is 0.12x; my base case applies 0.12x to $3.36B TTM revenue (~$403M EV), adds $910M cash and subtracts $7M leases, giving ~$1.31B and ~$1.41/share, or +0.7%—so the base offers no +30% long margin. TTM EBIT of -$640M, net income to common of -$1.65B and free cash flow of -$1.74B show no earnings power, while 2.20x book and -278.5% ROE make book no floor. The downside uses 0.03x EV/Sales plus ~$903M net cash at ~$1.08 (-23%) and the upside uses a rerated 0.46x EV/Sales at ~$2.63 (+88%), with the rerating supported only by the dated 2026-11-04 rate-relief news [S9] and Q3 2026 mortgage-origination growth [S5], not by cheapness. I call it a watch: optionality on the resale spread with 24.3% short interest, but the base case is today's price and cash cover against trailing burn is under a year.
Key numbers
- Share price: $1.40
- Market cap: $1.30B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $3.36B
- Price / book: 2.20x
The 15 boxes
- ✓ 1. Long-form business notes
Opendoor is a principal iBuyer, not a broker: it buys homes from sellers and resells them, earning a service fee plus title/escrow service revenue, with inventory funded by non-recourse asset-backed debt. Revenue ran $2.58B (FY2020) to a $15.57B peak (FY2022) then $4.37B (FY2025) on 11,700 homes sold, while the operating loss narrowed from -$931M (FY2022) to -$287M (FY2025); XBRL shows an operating loss in every year of the window. FY2025 net income to common was -$1.30B against a -$287M operating loss, a gap the business section does not explain. The business changed from 21 markets at FY2020 with List with Opendoor, Buy with Opendoor, trade-in and Home Loans, to 50 markets entering 2025, a nationwide buybox expansion in late 2025, and Cash Offer plus Cash Plus and title/escrow as the FY2025 primary offerings, with mortgage licensing added in February 2026.
- ✓ 2. Competitive advantage
The filings claim an advantage; the returns show none. Across FY2020-FY2025 revenue swung from $2.58B to a $15.57B FY2022 peak and back to $4.37B, and operating income was negative in every one of those six years (-$287.0M in FY2025) — scale never produced an operating profit. Gross profit stayed a thin spread ($220.0M-$730.0M a year, roughly 4%-9% of revenue), and management's stated moat (end-to-end digital, pricing engine, low-cost platform) is an assertion, not something the margin history supports. The competitive set is offline brokers and agents holding roughly 99% of a fragmented 4-million-transaction market, plus other iBuyers, title/escrow and mortgage originators; the company's own risk factors concede rivals may have lower cost of funds and more capital.
- ✓ 3. 10-Q takeaways
Q3 2026 revenue was $1,022 million, up 12% year-over-year and 16% quarter-over-quarter, as homes sold rose 6% and homes purchased jumped to 4,865 from 1,169. Gross margin fell to 3.7% from 7.2% on higher inventory valuation adjustments, and net loss widened to $218 million from $90 million, with a $96 million market-condition RSU stock-comp charge in the quarter. Nine-month revenue was still down 28% to $2,625 million. Q4 2026 guideposts call for at least 40% revenue growth but an Adjusted EBITDA loss of $70 million to $85 million; the risk section flags mortgage-business and regulatory exposure.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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