Redfin Stock Has Doubled This Year. Is It a Buy?

A soaring share price is often a sign that investors believe a company is executing well and that its future is bright. Redfin (NASDAQ: RDFN) shareholders have cheered as its share price has catapulted up 150% this calendar year. Let's see what all the excitement is about, and whether this consumer-friendly tech-based real estate company is worth buying today.

In the past, selling your home required hiring a realtor and paying 5% or more of the sale price of your property as a fee. Redfin aims to make this process easier and cheaper for consumers. The company only charges a 1.5% commission for selling your home and 1% if you buy a home with Redfin within 12 months. Its scalable tech-based platform enabled it to facilitate over 24,000 real estate transactions last quarter, up 23% year over year. Not only has it attracted more customers, but they own higher-priced homes, driving up the average service revenue per transaction by 10% year over year in the most recent quarter.

It also offers two other ways for homeowners to sell their houses. With its RedfinNow service, homeowners can choose to sell their house to the company for a 7% service fee. This enables the quickest sale option for homeowners and could be attractive when downsizing or if cash is tight. Management is carefully treading into this market and is only offering it in limited locations.

Source Fool.com