Opendoor Technologies (Open), the online real estate company, climbed Friday after the president of the federal reserve Jerome Powell suggested that the interest rate drops could be on the horizon during his speech by Jackson Hole. The prospect of a drop in borrowing costs has fueled solid purchasing interests, sending Opendoor shares more than 39% during the Friday session and leading the stock to a new 52 week higher. With this rally, Opendoor’s performance is now an impressive gain of more than 200%.
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Influential shareholders indicate that Fed as a key catalyst
High -level investors bind the Opendoor thrust directly to the position of the federal reserve on interest rates. The shareholder Anthony “Pomp” Pospiano congratulated the opening of President Jerome Powell with additional cuts, qualifying him as a major catalyst for the online real estate company. Its approval amplified the enthusiasm of retail investors, many considering the lower prices as a potential rear wind for the model focused on Opendoor housing.
Meanwhile, Eric Jackson, head of Emj Capital and a vocal supporter of the stock, echoes this feeling. He argued that even if Opendoor already has several positive points working in his favor, the possibility of reductions in future prices would be “pleasant to have in the back pocket” as another boost to the bullish affair.
Trade risks continue to loom
Despite its net rally, Opendoor is still faced with significant challenges. The online real estate company remains unprofitable and its commercial model is very sensitive to the low housing market and the pressure of high mortgage rates. In its second quarter results, Opendoor declared a loss of $ 0.04 per share, which was slightly wider than the consensual estimate of Wall Street with a loss of $ 0.03. On a positive note, revenues increased by 4% in annual sliding to 1.6 billion dollars, before analysts’ expectations of $ 1.5 billion.
Analysts believe that the latest increase in Opendoor’s stock prices seems to be more fueled by speculative momentum than by improving fundamentals.
Is the open stock a purchase?
Opendoor Technologies’ action has a moderate consensual sales rating among seven Wall Street analysts. These ratings are based on a purchase, two selected and four sales recommendations issued in the last three months. The average open price target of $ 1.02 implies a risk of decline of 79.64% compared to current levels.
Read the rest of analysts on open actions
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