Why Redfin Stock Is a Buy -- No Matter What the Real Estate Market Does
Back in the 1990s, the advent of the internet spawned myriad discount brokers that helped make buying stocks easier and cheaper for the mass consumer. Some 20 years later, the same disruptive forces are just beginning to mount an attack against the real estate industry. Seattle-based technologist Redfin (NASDAQ: RDFN) is helping lead the charge, with the goal of completely changing how Americans buy and sell homes -- with an added dash of tech-enabled customer service.
Headed into 2019, many economists have expressed concerns that the near-decade-long recovery in the real estate market would come to an end, especially as the Federal Reserve had hiked interest rates multiple times. But while residential real estate has cooled, that doesn't necessarily mean bad news for an agent of change like Redfin.
In the second quarter of 2019, revenue reaccelerated to 39% year-over-year growth, up from a 38% pace set in Q1. That growth is coming at a cost as the company makes a big push into ancillary services surrounding its online-based, low-cost brokerage model, but it's a cost that should pay off down the road if it can keep fostering top-line expansion. And with half of the year in the books, Redfin says it's doing just fine.
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