![]() The company exited the second quarter with $915 million of cash on the balance sheet as an additional $3.1 billion of corporate cash used to self-fund loan originations. There has been no insider selling in the stock since March of 2021 when the founder and others dumped a huge amount of equity when the shares were trading just under $25.00 a share. They have added millions of dollars to their holdings in aggregate. Several insiders, including the CEO, have been frequent and consistent buyers of the stock throughout 2022 at under $10.00 a share. The lone holdouts seem to be JPMorgan ($11.50 a share) and Wells Fargo ($10 price target) who continue to maintain Buy ratings. Price targets proffered range from $7 to $10 a share. Approximately a dozen analyst firms including Bank of America and UBS have Hold or Sell ratings on the shares. The stock is almost universally hated by the analyst community at the moment. The stock has a large short interest of just over 30%. In addition, Rocket's home search platform and real estate agent referral network grew overall real estate transactions by 25% from the same period, very impressive given the huge drop in transaction activity. Leadership expects to take another $50 million to $150 million out of expenses in the quarter ahead. ![]() The company did take $300 million out of its expenses during the quarter, compared to the first quarter of this year. The company posted a negative $27 million adjusted EBIDTA during the quarter, compared with a gain of $1.3 billion in 2Q2021. The average rate has recently dropped to around the five percent level even as the Federal Reserve continues to hike interest rates.Ĭlosed origination volume dropped to $34.5 billion, down drastically from $83.8 billion a year ago. The 30-year fixed rate mortgage jumped from 3.2% at the beginning of the year to nearly 6% at the end of June, the steepest and fastest rise in over 50 years. Adjusted revenue dropped by nearly 60% on a year-over-year basis to $1.13 billion, missing expectations by some $400 million.Īs you can see from the graphic above, the huge drop-off in sales was triggered by a massive slowdown in home closings. ![]() Rocket Companies posted a non-GAAP loss of three cents a share, a nickel worse than expected. On August 4th, the company posted second quarter numbers. The stock currently trades just south ten bucks a share and sports an approximate market capitalization of $19.5 billion. The company recently enabled 'single sign-on' across all of its businesses, so a customer can seamlessly move from capability to capability. The company is very focused on retaining their customers for life and efficiently targeting cross-selling other services within Rocket's ecosystem. Finally, Rocket Homes provides a home search platform and real estate agent referral network, which offers technology-enabled services to support the home buying and selling experience. It also offers Rocket Auto, an automotive retail marketplace that provides centralized and virtual car sales support to online car purchasing platforms. It also operates Rocket Loans, an online-based personal loans business as well as Amrock which provides title insurance, property valuation, and settlement service. It has several business holdings, starting with Rocket Mortgage which is the bulk of its business. ![]() The company just posted second quarter results and the stock has seen considerable insider buying in recent months. This is a name I have been accumulating within covered call positions over the last six weeks starting when the equity was trading in the mid $7s. Best known for its Rocket Mortgage business, the shares have managed a decent rally recently after a large pullback. Today, we take our first look at Rocket Companies, Inc. Home's where you go when you run out of homes.”― John le Carré ![]()
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