Why Credit Suisse raised price target for Opendoor Technologies

Credit suisse

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.