Consumer behavior toward online and digital trends was accelerated in part by the COVID-19 pandemic, and this does not exclude the housing market. Opendoor Technologies Inc. (OPEN) has been penetrating even mature markets, and the company has been expanding its buy-box eligibility standards for acquiring more properties. A buy-box is the list of criteria investment companies set for the types of houses they are willing to purchase. (See Opendoor Technologies stock charts on TipRanks)
Jason Helfstein of Oppenheimer & Co. provided an upbeat analysis on the stock, stating that its business model represents “the best pure-play opportunity given industry leading scale and unit economics.”
Helfstein assigned a Buy rating, and declared a price target of $25. This reflects a potential 12-month upside of 45.26% from the Wednesday closing share price of $17.21.
The five-star analyst explained that even though housing supply has been constrained, this hasn’t posed too much of an issue for Opendoor. This is due, in part, to the increasing comfort consumers have with buying and selling online. As a result, 70% of home sellers would consider going through the “iBuying,” or instant buying, route.
Opendoor provides a convenient and lower-friction method for those looking to sell a home, and its fees are typical of market standards.
Additionally, Helfstein wrote that by year's end, Opendoor has goals to expand to more cities and markets, as well as to run nationwide television commercials. This investment in advertising is expected to increase consumer awareness in the brand.
As recent as June 16th, a lock-up period expired, and Helfstein expects to see post lock-up “share price relief,” as has been the trend with similar situations.
On TipRanks, OPEN has an analyst rating consensus of Moderate Buy, based on 2 Buy and 2 Hold ratings. The average analyst Opendoor Technologies price target is $28, representing a possible 62.70% 12-month upside for the stock.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.