Down 87%, Here's Why Redfin Stock Is Wildly Undervalued Heading Into 2023
The stock for real estate services company Redfin (NASDAQ: RDFN) has been on a wild ride over the past three years. At its peak in early 2021, the stock reached a market cap of $10 billion, but it has since fallen 95% to $547 million. While that 2021 high was artificially inflated by overall market exuberance, today's market cap is significantly lower than the company's average during the years leading up to the pandemic.
There's no doubt that part of Redfin's fall from grace is due to business performance, but it could be argued that the market has overreacted. This is especially true recently as management made some important decisions that could reverse the company's fortunes in 2023.
Started in 2017 as an experiment and expanded in the years since, RedfinNow was the company's iBuying business. The iBuying business model is simple: Homesellers take a cash offer from Redfin, and the company tries to flip the house for a profit. The homeowners take a bit less money for the sale of their house in exchange for the speed and convenience a quick sale offers.
Source Fool.com
