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JPMorgan’s vibe check: still bullish
Opendoor didn’t exactly crush its second quarter, but JPMorgan is looking past the messy headline numbers and focusing on the trendline. Analyst Dae K Lee reiterated an Overweight rating and kept the price target at $8, saying the company’s fundamentals are improving faster than the average bear would expect.
Why the market is listening
Here’s the fun part: Opendoor’s revenue rose 23% sequentially to $883 million, contribution profit jumped 59% to $51 million, and contribution margin hit 5.8%, the best level in two years. That’s not “we’re cured” territory, but it is the kind of progress investors like to see when a turnaround story is trying to stop feeling like a never-ending group project.
The profitability plot twist
JPMorgan’s argument is basically: Opendoor may be getting closer to adjusted net income profitability without needing the housing market to suddenly become 2021 again.
A few details that stood out:
- Contracts are running at more than 500 per week
- True-seller conversion improved even at the same spread levels
- Aged inventory above 120 days dropped to 9% from 51% three years ago
- Management is guiding 3Q contribution margin to roughly 4% to 4.5%
That’s the sort of operating leverage story investors dream about — or at least the kind they’ll tolerate before bedtime.
Big picture
The stock nudged up in the session, but the bigger signal here is that Wall Street is still willing to underwrite the turnaround thesis. If Opendoor can keep cutting costs, turning inventory faster, and squeezing more from AI-driven efficiency, the profit path starts to look less like fantasy and more like a spreadsheet with a pulse.