Redfin Corporation (RDFN) - Preparing for market recovery

1. Current status:

- Pandemic Growth and Subsequent Decline: $RDFN experienced sharp growth during the pandemic, but its stock subsequently plunged as interest rates rose.

- Stable Situation: Despite the decline, $RDFN has held its ground in the market, preparing for new opportunities.

2. Changes in the real estate industry:

- Settlement of litigation: the agreement with the National Association of Realtors to change how commissions work may be beneficial to $RDFN as it fought against high commission fees.

3. Benefits from falling interest rates:

- Decline in mortgage rates: fixed mortgage rates have fallen to 6.5%, the lowest level in over a year.

- Housing market recovery: falling rates may increase demand for housing and bring more properties to the market, which could significantly boost Redfin's activity.

4. Cost optimization and digital investment:

- Cost reduction: $RDFN has cancelled its iBuying program, which should improve margins.

- Digital Transformation: the company has invested in its digital business, including a self-service platform for agents and homeowners, which is already showing results.

5. Financial outlook:

- Market capitalization and P/S ratio: $RDFN' s market capitalization is only $1 billion, meaning it trades at a price-to-sales ratio of around 1.

- Growth Potential: If the housing market recovers and Redfin returns to growth, there is significant potential for the stock to double in value.

Redfin is poised to take advantage of changes in the real estate industry and a potential drop in interest rates to grow again. Cost optimisation and investment in digital tools increase the chances of increased profitability. If market conditions improve, Redfin has significant upside potential, making the stock attractive to investors looking for opportunities in the real estate market.