Rocket stock short9/12/2023 More than 367 million shares changed hands in the stock's busiest trading day ever. Shares of Rocket, the parent company of Quicken Loans, closed up 71.2% at $41.60 after being halted several times for volatility. Heavily shorted mortgage provider Rocket Companies saw its stock surge on Tuesday, in an eye-popping move reminiscent of the rallies that powered GameStop and other so-called meme stocks earlier in the year. ![]() mortgage lender Quicken Loans, IPO is seen on the front facade of the New York Stock Exchange in New York City, Aug. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.A banner celebrating Rocket Companies Inc., the parent company of U.S. On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article. That’s a shareholder-friendly style that should eventually pay off but don’t count on 2022 being that year. It has consistently grown market share while paying large dividends and buying back stock. That said, as a longer-term investment, it’s hard to fault Rocket’s approach. 2021’s weaker operating results are likely to be followed by even softer numbers in 2022 given the surge in mortgage rates we’ve seen so far this year. Mortgage originators such as Rocket should be prepared for several lean years. It will take a while for housing to pick up steam again. The Federal Reserve is still at the beginning of its interest rate hiking cycle and inflation isn’t going to go away tomorrow. The question is whether that’s a good reason to buy RKT stock today. Rocket isn’t likely to make anything close to 2020 profits again in the near-future, but at some point interest rates will decline again, and Rocket will enjoy another banner year. As long as investors believe Rocket has the expertise to manage through multiple market cycles, its value should grow. Since then, Rocket’s share has soared to 8.8% through full-year 2021. The next few years were quiet for the company, with market share staying at 5% through 2018. Between 20, Rocket grew from 1.3% to 5.1% of the national mortgage origination market. Rocket was a dirt cheap stock based on 20 earnings, but its valuation looks more balanced against 2022’s projected, much weaker numbers.Īrguably, the most compelling data point for Rocket is its long-term market share growth. They expect to see revenues dropping by an additional 26% in 2022, even after they declined by double-digits for full-year 2021. For fiscal year 2022, analysts see Rocket’s earnings dropping 51% from 2021’s levels. Still, it’s shocking to see how quickly Rocket’s results have slid. With revenues down nearly 50% but costs barely moving, Rocket’s overall net income slid by more than two-thirds in the fourth quarter.Īnalysts had always warned that 2020’s record home buying enthusiasm couldn’t last forever. Meanwhile, its costs were virtually unchanged at $1.7 billion. In Q4 of 2021, Rocket’s revenues came in at $2.6 billion, which was down a massive amount from the $4.7 billion in the same quarter of 2020. However, the reversal of fortunes has been grim news for mortgage originators such as Rocket. That’s only natural the boom in 20 was rather abrupt and wasn’t going to go on forever. This suggests the hot housing market is set to cool off. Real estate experts say that search activity has dipped in 2022. The price of an average mortgage has surged from 3% to 5% over the past year, leaving potential homebuyers feeling demoralized. ![]() And that’s not a great market to be in right now. Rocket is one of the nation’s largest mortgage originators. And 2022 is hardly off to a better start, as RKT stock has slid into the single digits recently. Rocket Companies (NYSE: RKT) stock had a dismal 2021.
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