Airbnb: A Profitable Business with Global Growth Potential, Outshining Opendoor Technologies

Airbnb's revenue grew 13% to $3.1 billion in Q1, with a 21% profit margin. The company is expanding globally and adding new features like Experiences and Services, which can drive more spending from tourists. Opendoor Technologies, on the other hand, has extremely low gross margins and has never generated a profit while taking on debt to grow. Lululemon Athletica is also a better buy due to its history of revenue growth and steady market share gains in the apparel and athleisure industry.

Opendoor Technologies (OPEN) surged 14.38% on September 2, with a trading volume of $1.94 billion, ranking 30th in market activity. The rally was driven by retail investor enthusiasm, social media buzz, and its status as a meme stock with 24.64% short interest. Hedge fund manager Eric Jackson reignited interest by hinting at a potential meeting with Opendoor’s leadership, while new interim president Shrisha Radhakrishna’s share purchase signaled internal confidence. The stock’s volatility, with 90 moves exceeding 5% over the past year, reflects its susceptibility to market sentiment and speculative trading [1].

Recent momentum aligns with broader macroeconomic optimism, including Federal Reserve Chair Jerome Powell’s dovish remarks at Jackson Hole, which eased concerns about prolonged high rates. Opendoor’s Q2 revenue of $1.6 billion exceeded expectations, marking its first Adjusted EBITDA profitability since 2022. Despite a 30.51% revenue decline over three years, its five-year growth rate of 21.02% and a $3 billion enterprise value underscore investor cautious optimism. However, structural challenges persist, including a -7.6% pre-tax margin and a debt-to-equity ratio of 3.46, highlighting ongoing operational pressures [1].

Lululemon Athletica (LULU) has seen its stock take a hit this year, losing nearly half of its market value, while the broader market has increased by about 10%. People are worried about slower sales in North America and China, pushing the stock to a five-year low. Lululemon's business outside of China is picking up speed, and that could be what it needs to reignite revenue growth and lift margins [2].

In the first quarter of 2025, U.S. revenue grew just 2%, and comparable sales fell 1%. The reason given by the company was lower traffic and cautious shoppers cutting back on nonessential spending. This is a significant shift from the past, when the business saw double-digit growth. More competition and the softer economic backdrop are hurting performance in the U.S., which used to be the primary driver of income (and growth) for the company. The U.S. accounts for over 70% of Lululemon's sales and almost all of its operating profit [2].

China, once a shining star for Lululemon, has also raised concerns. The number of stores in China grew from 10 in 2018 to over 130 by 2024, and sales reached $1 billion in 2024, with double-digit growth. However, recent numbers show slower growth. In the first quarter of 2025, revenue in China rose 22% (excluding currency changes), which is good but moderating from the 30% growth rate posted in 2024. Some investors are concerned that China's economic problems, along with possible tariffs from sourcing in Vietnam, could reduce profits in this fast-growing area [2].

Lululemon's international business is quietly picking up steam. In the first quarter of fiscal 2025, revenue in its Rest of World (excluding China) segment grew 17% in constant currency, far outpacing North America's sluggish performance. The company is aggressively expanding its footprint in Europe and the Asia-Pacific region, with new store openings planned for Italy, Denmark, Belgium, Turkey, and the Czech Republic in 2025 [2].

Airbnb's revenue grew 13% to $3.1 billion in Q1, with a 21% profit margin. The company is expanding globally and adding new features like Experiences and Services, which can drive more spending from tourists. Opendoor Technologies, on the other hand, has extremely low gross margins and has never generated a profit while taking on debt to grow. Lululemon Athletica is also a better buy due to its history of revenue growth and steady market share gains in the apparel and athleisure industry [3].

References:
[1] https://www.ainvest.com/news/opendoor-surges-14-retail-frenzy-meme-stock-momentum-trading-volume-hits-1-94b-ranking-30th-2509/
[2] https://www.fool.com/investing/2025/09/03/lululemons-hidden-growth-engine-why-international/
[3] https://www.marketbeat.com/instant-alerts/filing-baird-financial-group-inc-buys-2471-shares-of-lululemon-athletica-inc-lulu-2025-09-02/