Opendoor And Offerpad

Stock: OPAD,OPEN

Rating: Buy

Author: Waleed M. Tariq

 Overview

  • Opendoor is a top digital real estate platform.
  • Opendoor’s “iBuying” service lets homeowners sell without a broker or agent.
  • Opendoor Complete provides end-to-end service to homeowners.

Bullish

  • Opendoor will lead iBuying next year, followed by Offerpad.
  • OPEN’s acquisition-and-sale strategy balances growth and profitability, while OPAD has stronger profitability and less growth.
  • OPEN and OPAD’s innovative platforms make me bullish.

Bearish

  • Zillow’s failure caused iBuying stock prices to drop sharply last month.

2022 U.S. housing market fundamentals strong

  • Statista predicts the U.S. real estate industry will be $350 billion in 2021 and grow 4.21 percent by 2025.
  • Forbes expects home sales to rise 6.6% and prices to rise 2.9% in 2022. 3.3 percent job market income increase and 45 million millennial first-time homebuyers will accompany this.

Market digitization

  • The epidemic has accelerated the digitization of most industries.
  • iBuying has lowered real estate expenses and obstacles.
  • Millennial and Gen Z homeowners embrace digitalization. Remote job has allowed Americans to buy a property without worrying about the commute.

Opendoor’s Competitive Edge

  • Opendoor has found a balance between expansion and profitability, allowing it to dominate the industry with its innovative technologies.
  • The organization is spending heavily in its internal processes, vendor network, tooling, and automation for 2022 growth.

Offerpad’s Rise

  • Offerpad has larger profits since it renovates homes, which increases their market value.
  • “Flex” is the company’s blend between iBuying and traditional methods. This helps clients adjust to the digital platform.
  • OPAD is on the right track to increase share value by utilizing the market potential.

Conclusion

  • The “Zillow effect” gives the equities an inherent upside, making them ideal portfolio additions.