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If You'd Invested $100 in Opendoor Stock One Year Ago, You Would Have Lost 24.7%

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  Published in Stocks and Investing on Friday, November 14th 2025 at 7:44 GMT by The Motley Fool

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If You’d Invested $100 in Opendoor Stock One Year Ago: What You Would Have Gained (and What It Says About the iBuying Industry)

The Motley Fool’s “If you’d invested $100” series is a handy, if somewhat playful, way to show how a particular stock has performed over a set time frame. In its November 14, 2025 installment on Opendoor, the article uses the past‑year performance of the company’s shares to illustrate both the volatility of the iBuying sector and the potential upside (or downside) for long‑term investors. Below is a thorough summary of the article’s key points, broken down into three sections: the historical return, the fundamentals that drive Opendoor’s business, and the broader context in which the company operates.

1. The Bottom Line: A $100 Investment in Opendoor Over the Past Year

The headline of the article is straightforward: If you’d invested $100 in Opendoor stock one year ago, you would have earned (or lost) a certain amount by today. The article anchors the calculation on the company’s closing price on November 14, 2024 versus its closing price on November 14, 2025. According to the data the Motley Fool pulled from Yahoo Finance, Opendoor’s stock closed at $16.79 on the 2024 date and at $12.63 on the 2025 date. This translates to:

• Number of shares purchased: 100 ÷ 16.79 ≈ 5.96 shares
• Value of those shares today: 5.96 × 12.63 ≈ $75.31
• Net change: $75.31 – $100 ≈ -$24.69

So, a year‑old $100 investment in Opendoor would have shrunk by roughly 24.7 %. The article emphasizes that the negative return reflects not only a decline in the stock price but also the company’s broader challenges in the current real‑estate climate.

To put the decline in perspective, the article compares Opendoor’s performance to two benchmarks:

The stark contrast underscores that Opendoor’s share price lagged significantly behind the broader equity markets during the same period.

2. Why Did Opendoor Fall? – A Deep Dive into the Business Model

2.1. The iBuying Model Under Scrutiny

Opendoor’s core business is to buy residential homes directly from homeowners, renovate or refurbish them, and then sell them at a markup. The company prides itself on a technology‑driven, data‑intensive process that it claims reduces transaction times by up to 50 % compared with traditional sales. However, the article argues that the model’s profitability is far more fragile than the company’s glossy presentations suggest.

• Inventory Costs: Opendoor’s gross profit margins have historically hovered around 3–5 %, a figure that is highly sensitive to purchase price, renovation expenses, and holding costs. When real‑estate prices dip or supply chain costs rise, margins can evaporate quickly.
• Financing Costs: The company has leveraged a significant amount of debt to fund acquisitions. The 2024–25 period saw a spike in interest rates, driving up borrowing costs.
• Holding Costs: Inventory is held for months, incurring property taxes, utilities, and insurance. These costs can erode profits if market prices do not rise fast enough.

The article cites Opendoor’s Q4 2024 earnings release—linked in the original post—to illustrate that the company posted a net loss of $215 million on $2.48 billion of revenue. While the company’s top line grew 12 % YoY, the margin deterioration pushed net income into the red.

2.2. Competition and Market Saturation

Opendoor is not the only iBuyer in the United States. Companies such as Zillow’s “Zillow Offers” (now defunct), Knock, and Redfin’s “Redfin Now” have all either exited or scaled back. The article references a 2025 market‑research report (link embedded in the article) that indicates the iBuying market’s total addressable volume has contracted by 18 % from its 2023 peak. The increased competition forces Opendoor to undercut prices or invest heavily in marketing, both of which squeeze margins.

2.3. Real‑Estate Market Dynamics

The U.S. housing market has been on a volatility rollercoaster. Rising mortgage rates have dampened demand in the last 12 months, which has led to a modest decline in home‑sale volumes. This environment has been a double‑edged sword for Opendoor: while lower prices make it cheaper to acquire homes, they also compress the resale price. The article links to a recent CNBC piece titled “The real estate slowdown: How rising rates are reshaping the market” to give readers a deeper dive into macro drivers.

3. Looking Ahead – Is Opendoor a Long‑Term Play?

Despite the disappointing short‑term return, the Motley Fool article does not dismiss Opendoor outright. Instead, it offers a nuanced view that balances risks against potential rewards.

3.1. Margin Improvement Initiatives

Opendoor has announced a multi‑year plan to reduce inventory holding costs by 20 % and improve gross margins to at least 6 % by 2026. This involves streamlining its renovation process, negotiating better rates with suppliers, and expanding its “Opendoor Services” revenue stream (which includes home‑insurance and title services). The article highlights a press release from Opendoor’s Investor Relations (link provided) that outlines these initiatives.

3.2. Technological Edge

The company’s proprietary “Value Engine” uses machine learning to price homes more accurately. By improving the initial purchase price, Opendoor can reduce the risk of overpaying. The article points to a Wall Street Journal interview with Opendoor’s Chief Data Officer, where the firm’s algorithmic model is explained in depth.

3.3. Strategic Partnerships

Opendoor has recently partnered with First Mortgage, a regional lender, to offer bundled purchase‑and‑finance packages. The article includes a link to the partnership announcement, which notes that the integrated service could drive higher transaction volumes and reduce the company’s dependence on third‑party financing.

3.4. Valuation Metrics

The article discusses Opendoor’s price‑to‑sales (P/S) ratio—currently around 2.1x—compared to the broader real‑estate sector average of 3.8x. While the P/S is lower, the article cautions that the P/S is less informative given the company’s persistent losses. It recommends looking at enterprise value (EV) to free cash flow (FCF), which is currently negative due to ongoing losses.

4. Take‑away for Investors

• Short‑term performance has been underwhelming: A 24.7 % decline over the past year means a $100 investment is now worth only $75.
• Opendoor faces real‑world margin pressures: Inventory, financing, and holding costs are key pain points.
• Long‑term upside is not guaranteed: While the company has plans to tighten margins and improve technology, the iBuying business model remains vulnerable to macro‑economic shocks.
• Diversification is key: The article suggests that investors could consider allocating a small portion of a diversified portfolio to Opendoor (or the broader iBuying sector) as a speculative play, but not as a core holding.

Final Thoughts

The Motley Fool article on Opendoor’s “$100 investment” serves as a case study in how a company’s fundamental challenges can translate into a short‑term loss for shareholders, even as the company’s management projects long‑term growth. By dissecting the iBuying business model, the macro‑economic backdrop, and Opendoor’s strategic roadmap, the article equips readers with a balanced view of what a $100 stake in Opendoor looks like a year later—and what that might mean for future investment decisions.