Prediction: This shares of artificial intelligence (AI) will defeat Opendoor Technologies | Motley fool
Opendoor was that we have, but this Fintech likes as a long -term winner.
Opendoor Technologies (OPEN -13.59%) Gailed investors in the last three months as several other shares. In the last three months, an online rabble has jumped an incredible 1.400% and at one point the ZO passed more than $ 0.50 to more than $ 10.
Rally began with the manager of the hedge fund Eric Jackson, who has made the case that the shares could be another Carvanawho jumped nearly 100 times higher than its original price after almost bankruptcy in 2022. This argument gained Steam online and helped turn the opendoor into the same supply as originally rising to high volume and no news.
Since then, shares have received real news. This included the prospect of reducing interest rates of the Federal Reserve next week and later in the year, and the company’s council was redesigned by its management team. In August, CEO Carrie Wheeler resigned; After hours in the center, named Opendoor Shopify The Chief Operations Director of Kaz at Nevětian as his new CEO, who smells of 80%supplies on Thursday.
In addition, the company said that co -founders Keith Rabois and Eric Wu re -joined the Board of Directors and the companies associated with them invested in Opendoor $ 40 million. It is easy to understand how this message would inject enthusiasm into stocks, especially then Nasdaq Exchange earlier.
In the last three months, however, nothing has changed for Opendoor as a company. The company has never reported year -round profits and is expected that business will reduce this quarter due to the weak housing market.
It is still a high risk with a dubious business model. If you are looking for a similar action that can earn on falling interest rates, I think that Upstart Holdings (Upst 1.54%) It is a better bet and that it can overcome the opendoor in the next three years.
Image source: Getty Images.
Upstart’s opportunity
UPSTART has a number of things in common with the opendoor. They were both publicly publicly in 2020 and initially left the gate before they threw themselves in 2022 because the interest rates increased and technological shares crashed.
UPSTART is the originator of the loan. It uses artificial intelligence technology (AI) to examine applicants and create results that claim that once they create a loan, it usually sells it to one of its financial partners, so it does not keep the debt in its books.
Like Opendoor’s, UPSTART was operating in 2022 in 2022, but the company reworked its business with an improved AI model, which includes conversion rats for its loans. Even in an environment with a high interest rate, it provides strong returned growth. And now it is profitable based on generally accepts accounting principles (GAAP).
Return in the second quarter jumped by 102% to $ 257 million, we have a 159% increase in the volume of transactions. The company announced that the GAAP network of $ 5.6 million and expects to be 35 million for the whole year.
UPSTART built its business surrounds consumer loans, but quickly expands to car and home loans. The housing loan market, where it could potentially compete with Opendoor, is massive. In the second quarter, UPSTART domestic origin increased by almost 800% of the year -on -year quarter to $ 68 million. This is still a small fraction of his business, but there is obviously greater growth in the housing loan market.
UPSTART vs. Opendoor
UPSTART and Opendoor have similar market caps after the growth of Opendoor. Upstart is awarded $ 6.1 billion on Friday, while the Opendoor market ceiling is $ 6.7 billion.
Both companies are also chasing massive addressable markets and are likely to benefit from lower interest rates.
However, UPSTART is one of the two that has shown that it can grow in a demanding macro environment, and its business is now looking for advantageous. Meanwhile, there are real questions in Opendoor that home breathing can increase as a business model and deliver to compose. Undoubtedly, both Zillow Group And redfin (a subsidiary Rocket Companies) Bowed from the competition of ibuing and found that it is difficult and prone to losses.
Due to these differences, despite the fanfare over the opendoor, UPSTART looks like a better bet of TEDay. Over the next three years, UPSTART looks like the winner of both.
Jeremy Bowman has positions in Carvan, missile companies, shopify and upstart. Motley Beble has positions and recommends Shopify, UPSTART and ZILLOW GROUP. Motley Beble recommends Nasdaq and Rocket Companies. Motley fool has a publication of politics.