What happened

Shares of Redfin (RDFN -3.39%) were moving higher in January, overcoming headwinds from a weakening real estate market and an analyst downgrade, to deliver gains of 24%, according to S&P Global Market Intelligence

The online real estate brokerage seemed to ride the broader market recovery and benefited from the Federal Reserve's dovish decision at the end of the month to hold off on future rate hikes for the time being. In addition, the company announced two significant expansions. As the chart below shows, it was a volatile month for Redfin, but the stock finished up considerably.

RDFN Chart

RDFN data by YCharts.

So what

This January was the best start to the year for the stock market in more than 30 years, and the rally was kinder to growth stocks like Redfin than the broader market, as investor sentiment seemed to shift from fearing a recession in the fourth quarter to capitalizing on the sell-off.

Check out the latest Redfin earnings call transcript.

A Redfin For Sale sign outside a house.

Image source: Redfin.

Two pieces of news in particular seemed to underscore Redfin's growth potential. First, on Jan. 9, the company said its RedfinNow service would expand to the Los Angeles market, the nation's second-largest real estate market. RedfinNow gives home sellers the option to get a no-obligation cash offer from the brokerage, essentially getting Redfin into the home-flipping business. L.A. is now the biggest market where Redfin offers the service.

A few days later, Redfin said it would enter an even larger market, launching in Canada for the first time with plans to go live in Toronto and Vancouver in March and plans to expand to other provinces thereafter. 

Those announcements and broader market sentiment seemed to push the stock higher in spite of data that showed the housing market slowing and Jefferies downgrading the stock from buy to hold due to challenges in the housing market.

Now what 

Even Redfin itself was souring on the housing market, predicting 2019 would be the coolest in years. Nonetheless, the long-term opportunity in front of Redfin is substantial and the company continues to make progress as the moves in Los Angeles and Canada indicate. Redfin will give investors an update on its performance on Feb. 14 when it turns in fourth-quarter results. 

Analysts expect revenue to increase 22% to $117 million, and its loss per share widen from -$0.02 to -$0.18.