Rocket Companies (RKT) Slides On Earnings, Revenue Miss
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Rocket Companies (NYSE: RKT) reported earnings aftermarket Thursday, sending its shares lower during Friday's session.
The company missed earnings and revenue expectations, reporting a loss per share of $0.03 on revenue of $1.4 billion. The consensus estimate for earnings was $0.02 per share, with revenue expected to be $1.54 billion.
"As the mortgage market continues to transition, we are actively investing in our business and transforming the Rocket services and engagement platforms to better serve our clients," said Jay Farner, Vice Chairman and CEO of Rocket Companies. "In the second quarter alone, Rocket Companies introduced new lending programs, forged new mortgage partnerships, officially launched our solar business and expanded our brand deeper into Canada. These moves provide us immediate opportunities today, and a tremendous runway for growth and expansion well into the future."
In the third quarter, Rocket expects closed loan volume between $23 billion and $28 billion and gain on sale margins of 2.50% to 2.80%.
Following the report, Barclays analyst Mark DeVries kept an Equal-Weight rating on Rocket Companies shares, cutting the firm's price target on the stock to $7 from $8 per share.
"Origination volumes missed our estimate and the guidance range in the quarter although RKT was able to reduce expenses faster than previously expected. The 3Q22 guidance was below our prior expectations as the origination market remains challenging. The shares trade at a premium to peers despite the outlook, so we remain EW," said DeVries.
Rocket Companies' shares declined in the early part of Friday's session, hitting a low of $8.83. However, they have since regained most of those early losses, now down 1.6% at around $10.13 per share.
By Sam Boughedda
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