Shares of Redfin (NASDAQ:RDFN) jumped nearly 12% last month, according to data provided by S&P Global Market Intelligence, as investors grew more bullish on the real-estate company's vast growth potential.
Redfin's stock entered February with strong momentum following a 24% surge in January. Investors appeared to take a more optimistic view of Redfin's prospects after Federal Reserve Chairman Jerome Powell suggested in early January that the central bank would take a more patient approach to interest rate increases. Lower rates help to make mortgages -- and, by extension, housing -- more affordable, which in turn could provide a boost to Redfin's brokerage business.
Then on Feb. 14, Redfin announced strong fourth-quarter results. Revenue surged 30% year over year to $124 million, as Redfin's small but steadily growing share of the massive U.S. housing market increased 10 basis points to 0.81%.
Additionally, CEO Glenn Kelman highlighted some key competitive advantages that Redfin possesses in the house flipping market during the company's earnings conference call, suggesting that investors may be underestimating this area of its business.
Even after a slight pullback in March, Redfin's stock is already up more than 36% in 2019. Yet plenty of gains may still be ahead for investors, particularly if the discount brokerage can continue to expand its share of the $166 billion U.S. real estate brokerage industry in the years ahead.