"Zillow Group (NASDAQ:Z) tried this exact model and imploded in 2021. The real estate giant accumulated billions in inventory, couldn't liquidate homes profitably when rates rose, and exited iBuying entirely. Zillow still operates at negative margins despite $2.5 billion in revenue and a $15.7 billion market cap. If a company 10 times Opendoor's size with an established brand couldn't make the unit economics work, what makes Opendoor different?"
"Opendoor's cash flow statements look schizophrenic because of inventory swings. In 2023, the company reported $2.34 billion in operating cash flow, which sounds impressive until you realize $2.61 billion came from buying homes (inventory buildup). Strip out inventory changes, and core operations burned $269 million. In 2024, operating cash flow went negative $595 million as the company liquidated inventory. Adjusted for inventory, core burn was still $146 million."
Opendoor Technologies' stock rose 378% over the past year despite a $595 million operating cash flow burn in 2024 and a negative 6.7% profit margin. Revenue fell 33.6% year-over-year in Q3 2025 and the company reported a $90 million net loss that quarter, marking seven consecutive years of cash burn. Zillow's prior iBuying failure shows inventory accumulation and rate sensitivity can force unprofitable liquidations; Zillow still records negative margins despite $2.5 billion revenue. Adjusted for inventory swings, core operations burned hundreds of millions and an 8% gross margin leaves significant balance-sheet risk, while retail speculation and policy proposals drive the stock.
Read at 24/7 Wall St.
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