Architect of the 91% rally in Opendoor reveals his plan to make it the “next Carvana”

When Eric Jackson was bullish on Carvana back in June 2023, with the used car seller down from a peak of $377 to trade at $25, nobody cared. After that stock’s comeback to trading above $350, a lot more people are listening to what he has to say.

His latest campaign? A company called Opendoor Technologies, an online real estate company, which he argues is poised to trade north of $80 within a few years despite being worth only about $1.66 at close yesterday. Still, retail enthusiasm around the stock has sent its price shooting up lately.

Volumes traded in Opendoor hit a record on Wednesday amid its 43% rally, which took the stock to $1.49 and brought this week’s gains up to 111.8% though yesterday.

Call volumes have hit records in back-to-back sessions, with a whopping 626,765 changing hands on Thursday. Coming into this week, the 20-day average was just 16,757.

Opendoor went public in late 2020 via a SPAC led by venture capitalist and All-In podcaster Chamath Palihapitiya.

Jackson’s logic, summarized: the consensus estimate for Opendoor’s fiscal 2029 sales (albeit from just two analysts who have submitted projections) is $11.6 billion. That’s something the company actually surpassed before, back in its fiscal 2022, when it booked $15.6 billion in sales. He rounds that forecast up to $12 billion and slaps on a 5x enterprise value to estimated sales multiple (its peak multiple in 2021) to get there. This also presumes that net debt falls to zero over this time.

The Takeaway

The firm operates in the same business as the since shuttered home-flipping service Zillow Offers, and suffered a spectacular fall from grace from an intraday peak of $39 in February 2021 down to just $0.50 in late June. Still, Sherwood News’ own Luke Kawa got Jackson to lay out the precise case for OPEN in full.

Palantir closed at $154 a share yesterday, and has relentlessly outrun the S&P 500 Index over the past 12 months, up 415.9% compared to a “measly” 11.1% increase for the S&P over the same period.

The price-to-earnings ratio on this stock is massive, the biggest in the S&P 500 and by a lot.

Right now, shareholders are paying 228x earnings per share, which laps the 174x for Boeing, the 135x for Tesla, and the 116x for CrowdStrike.