Credit Suisse has raised Opendoor’s price target, analyst Yoni Yadgaran confirms.
Yoni says that the coverage of Opendoor Technologies(OPEN) was initiated with an Outperform rating and a $37 target price.
OPEN’S primary offering provides an online alternative to the traditional experience of listing a home for sale by allowing a homeowner to directly sell their home to OPEN for a pre-determined price.
Yoni also noted that OPEN provides an instant offer with expedited closing times (~3 days vs. ~90 under traditional model), convenience (via automation/digitized experience), and flexibility, in exchange for a service fee (6% – 9%) that is modestly higher than the traditional agent commission fee structure (5% – 6%) in the traditional home listing model.
According to Credit Suisse estimates, OPEN was 3.5x next largest competitor in 2019.
Significant transactional complexity, economies of scale, and relatively high start-up capital costs insulates OPEN from incremental competition, Yoni added.