What happened

Shares of Redfin (RDFN 4.08%) have been caught in the downdraft afflicting markets in recent weeks, down 40% in the last few weeks. But on Tuesday the stock, along with the broader market, reversed course, with Redfin shares up more than 10% in late morning trading.

So what

It's been a rough few weeks to be invested in growth companies, and Redfin has been no exception. The company's stock sell-off was triggered by the guidance attached to its late February earnings report. Redfin's core real estate market is booming, but the company said it has been held back by a shortage of homes for sale and not enough agents to meet demand.

A for sale sign in front of a house.

Image source: Getty Images.

In an environment where investors are beginning to fret about growth prospects for highly valued companies, Redfin's guidance provided ample fodder to fuel a sell-off.

But as problems go, a red-hot market and not enough capacity to fully capture it is a relatively good one to have. As sell-offs fueled more on market sentiment than company fundamentals tend to do, things turned on a dime on Tuesday, with the Nasdaq Composite Index reversing recent selling with a 3%-plus jump. Redfin shares are going along for the ride.

Now what

Redfin is still down slightly year to date, but up 45% in the last six months. This has been a volatile stock, and I see no reason to believe that will not continue into the future.

For long-term-focused investors, there is still a lot to like about Redfin. The company has just 1% of its core market right now, and continues to add new products like mortgages and services that give it other opportunities to grow. I don't know what to expect from the stock over the next six months or year, but the company looks like a long-term winner.