Opendoor Shares Fall Over 20% After Weak Q3 Guidance

Opendoor Technologies faced a sharp decline in its stock price following the release of mixed Q2 earnings and a weak financial forecast for Q3 2025, with shares dropping between 20.63% and 24.6%. The company reported slight revenue growth and its first positive adjusted EBITDA in three years, but the contribution margin decreased and home purchases fell significantly as Opendoor shifted its strategy to a distributed platform model involving real estate agents. Despite these operational changes, the housing market challenges, primarily due to high mortgage rates, led to cautious guidance projecting a nearly 50% sequential revenue drop and an adjusted EBITDA loss in Q3. Citigroup downgraded Opendoor's stock rating to "Sell" with a lowered price target of $0.70, reflecting negative market sentiment and expectations of continued difficulties. Investors remain wary as Opendoor's financial health shows distress signals, including a risk of bankruptcy within two years, although some metrics like expanding operating margins offer limited optimism. Overall, the market reaction underscores skepticism about Opendoor's near-term prospects despite strategic shifts and recent compliance improvements.