Opendoor Technologies

Hello Folks,

Is my first post with a new stock for the board so if the formatting or details are not proper my apologies upfront. 
I look for disruptive companies in addition to high revenue growth companies and have taken a small starter position in Opendoor (OPEN). 
It came public via a SPAC(IPOB) but think they will prove similar to Carvana from the auto buying side on the real estate side
To get a feel for the process I went through with submitting my home information to their site to 
see if the offer from the site would want me sell to them. Took less than 15 minutes to receive the offer
Their offer was on the mark to where I could see myself selling to them without going through the 
hassle of listing and working with a realtor. Their sales this year tanked due to COVID and them pulling back. 
Prior year sales had significant growth and they are projecting significant revenue increases 
after this year going forward.

The drawbacks I see with them in that their Margins at the Gross level will be low and they will 
have to work with significant volume to make money at the Net level. 
Also, there is no recurring revenue concept with them as a home buy/sell is a rare event in many 
peoples life times.

The advantages though are the very very significant size of the market and their ability to then 
use the home buying process to enter into ancillary areas of the entire home buying process. 
One could envisage a printer scenario with them buying the home at near market but then enticing 
the buyer and seller with great financing and closing options which would enable the company to 
make money on the entire transaction

Was wondering if any of the board members had reviewed the stock and had any thoughts on them

Here are the revenue numbers from their investor presentation. 

Year           2017    2018     2019   2020E    2021P   2022P   2023P

Home sales     3127    7470     18799   9673     13458   24030   37689
Growth %       113     139       152    (49)       39      79      57

Revenue        0.7      1.8       4.7     2.5      3.2     6.2     9.8
Growth %       109      159       158     (48)     41      79      58

GM %           9.3      7.9       6.3      7.0     7.8     8.4     9.1

Here is the link to the investor presentation for the rest of the numbers

[https://www.opendoor.com/w/wp-content/uploads/2020/09/Opendo...](https://www.opendoor.com/w/wp-content/uploads/2020/09/Opendoor-overview-investor-presentation.pdf)

Please feel free to delete if the folks feel company does not belong on this site

Thanks
6 Likes

Did you get a comparison offer from Zillow?

I did, Zillow is going to get back in 1- 3 days. I do not know what their number is going to be while with these guys I got the estimated number right away.

1 Like

Reformatting to not use fixed-width font, no manual line breaks, and < pre > < /pre > (no spaces) around the table.

Hello Folks,

Is my first post with a new stock for the board so if the formatting or details are not proper my apologies upfront. I look for disruptive companies in addition to high revenue growth companies and have taken a small starter position in Opendoor (OPEN). It came public via a SPAC(IPOB) but think they will prove similar to Carvana from the auto buying side on the real estate side To get a feel for the process I went through with submitting my home information to their site to see if the offer from the site would want me sell to them. Took less than 15 minutes to receive the offer Their offer was on the mark to where I could see myself selling to them without going through the hassle of listing and working with a realtor. Their sales this year tanked due to COVID and them pulling back. Prior year sales had significant growth and they are projecting significant revenue increases after this year going forward.

The drawbacks I see with them in that their Margins at the Gross level will be low and they will have to work with significant volume to make money at the Net level. Also, there is no recurring revenue concept with them as a home buy/sell is a rare event in many peoples life times.

The advantages though are the very very significant size of the market and their ability to then use the home buying process to enter into ancillary areas of the entire home buying process. One could envisage a printer scenario with them buying the home at near market but then enticing the buyer and seller with great financing and closing options which would enable the company to make money on the entire transaction

Was wondering if any of the board members had reviewed the stock and had any thoughts on them

Here are the revenue numbers from their investor presentation.


Year           2017    2018     2019   2020E    2021P   2022P   2023P

Home sales     3127    7470     18799   9673     13458   24030   37689
Growth %       113     139       152    (49)       39      79      57

Revenue        0.7      1.8       4.7     2.5      3.2     6.2     9.8
Growth %       109      159       158     (48)     41      79      58

GM %           9.3      7.9       6.3      7.0     7.8     8.4     9.1

Here is the link to the investor presentation for the rest of the numbers

https://www.opendoor.com/w/wp-content/uploads/2020/09/Opendo…

Please feel free to delete if the folks feel company does not belong on this site

Thanks

5 Likes

I tried both of these the past year. My problem is they charged more for their service than selling through a traditional realtor. At least in the DFW area, that was the case. Ended up going with Redfin, sold in 1 month and saved over $10k from the other services and got pretty near my asking price. And to top it off, my investment in Redfin is up over 200% at this time.
I was expecting to see a discount over the traditional realtor path and just did not see it. Redfin did give me that cost break which is why I went with them. Even selling in the middle of the pandemic did not pose a problem. Very smooth and easy process.
Just my experience.

4 Likes

I’m still pretty new to SaaS stock investing but I do have a lot of experience buying and selling real estate. My biggest problem with Opendoor is the GM%. It is very thin. When buying a house as an investment, you have to make sure to buy at a price that you can allow for some unknowns and still sell for a profit. When you are selling a house, there is much more uncertainty on what it will sell for than most products. Even though this is disruption to the industry, it does not promise the high GM% that our other stocks do. If they scale and Revenue Growth % is great, it will still produce a small profit %. And housing is red hot! If the market turns down, they would take a bath on every house they have in inventory with those small margins.

JimmyUtah

6 Likes