Rocket Companies (RKT) 2nd quarter 2021 earnings report overview
Category: Rocket Companies (RKT)
Date: 17 August 2021 Stock price of Rocket Companies (RKT): $18.29 Market Capital of Rocket Companies (RKT): $36.3 billion We take a look at the 2nd quarter 2021 earnings report of Rocket Companies a holding company of firms active in personal finance and consumer technology brands including Rocket Mortgage, Rocket Homes, Rocket Loans, Rocket Auto etc. For the quarter the group reported net revenues of $2.6 billion and net income of $1.037 billion.
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Our mortgage, real estate, auto and personal finance brands, powered by the tech-driven Rocket platform, delivered a strong second quarter -Jay Farner, Vice Chairman and CEO of Rocket Companies"
More About Rocket Companies
Rocket Companies is a Detroit-based holding company consisting of personal finance and consumer technology brands including Rocket Mortgage, Rocket Homes, Rocket Loans, Rocket Auto, Rock Central, Amrock, Core Digital Media, Rock Connections, Lendesk and Edison Financial. Since 1985, Rocket Companies has been obsessed with helping its clients achieve the American dream of home ownership and financial freedom. Rocket Companies offers an industry-leading client experience powered by our simple, fast and trusted digital solutions. Rocket Companies has approximately 26,000 team members across the United States and Canada. Rocket Companies ranked #5 on Fortune's list of the "100 Best Companies to Work For" in 2021 and has placed in the top third of the list for 18 consecutive years
Overview of Rocket Companies (RKT) 2nd quarter 2021 earnings report
DETROIT, August 12, 2021 – Rocket Companies, Inc. (NYSE: RKT) (“Rocket Companies” or the “Company”), a Detroit based holding company consisting of tech-driven real estate, mortgage and eCommerce businesses – including Rocket Mortgage, Rocket Homes, Amrock and Rocket Auto – today announced results for second quarter of 2021.
“Our mortgage, real estate, auto and personal finance brands, powered by the tech-driven Rocket platform, delivered a strong second quarter,” said Jay Farner, Vice Chairman and CEO of Rocket Companies. “Our record purchase mortgage volume puts us well on the path to our goal of becoming the largest retail home purchase lender in the nation by the end of 2023. That strong momentum will carry us into the second half of the year, as we expect our 2021 mortgage origination closed loan volume to exceed 2020’s record performance of $320 billion. Our newer businesses Rocket Homes, Rocket Auto and solar program leverage our existing platform and represent significant growth opportunities.”
• Achieved record purchase closed loan origination volume, nearly doubling year-over-year
• Fourth consecutive quarter of meeting or exceeding guidance for closed loan, net rate lock volume, and gain on sale margins
• Generated revenue, net of $2.7 billion and Adjusted Revenue of $2.8 billion
• Delivered net income of $1.0 billion and Adjusted Net Income of $0.9 billion
Financial Highlights During the second quarter of 2021:
“Our mortgage, real estate, auto and personal finance brands, powered by the tech-driven Rocket platform, delivered a strong second quarter,” said Jay Farner, Vice Chairman and CEO of Rocket Companies. “Our record purchase mortgage volume puts us well on the path to our goal of becoming the largest retail home purchase lender in the nation by the end of 2023. That strong momentum will carry us into the second half of the year, as we expect our 2021 mortgage origination closed loan volume to exceed 2020’s record performance of $320 billion. Our newer businesses Rocket Homes, Rocket Auto and solar program leverage our existing platform and represent significant growth opportunities.”
• Achieved record purchase closed loan origination volume, nearly doubling year-over-year
• Fourth consecutive quarter of meeting or exceeding guidance for closed loan, net rate lock volume, and gain on sale margins
• Generated revenue, net of $2.7 billion and Adjusted Revenue of $2.8 billion
• Delivered net income of $1.0 billion and Adjusted Net Income of $0.9 billion
Financial Highlights During the second quarter of 2021:
- Generated total revenue, net of $2.7 billion and Adjusted Revenue of $2.8 billion in Q2 '21, both more than double Q2 '19. We compare certain revenue and profitability measures to 2019 as we experienced a historically low interest rate environment in combination with limited industry capacity during 2020.
- Rocket Mortgage generated $84 billion in mortgage origination closed loan volume and gain on sale margin of 2.78%. Our closed loan volume was more than double Q2 '19 and exceeded that of the entire year of 2018.
- Q2 '21 represented Rocket Mortgage's strongest purchase closed loan volume in company history. Our purchase volume was nearly double both Q1'21 and Q2'20 levels, driven by our focus on a superior, technology-driven client experience, product innovation and our integrated, end-to-end home buying ecosystem.
- Generated $376.4 million of other income in Q2 '21, driven primarily by Amrock, our title insurance services, property valuation, and settlement services company, which generated 260,300 closings, up 193% from Q2 '19.
- Generated net income of $1.0 billion, which exceeded full year 2019 net income of $0.9 billion and Adjusted Net Income of $0.9 billion during Q2 ’21, which was more than triple Q2 ’19 levels, demonstrating the scalability of our platform.
- Achieved Adjusted EBITDA of $1.3 billion during Q2 ‘21, more than triple Q2 ’19 levels. Our Adjusted EBITDA margin was 46% for Q2 ’21, which compares to 30% for Q2 ’19, demonstrating the scalability of our platform.
- Grew servicing book unpaid principal balance to $507 billion at June 30, 2021, up 34% from June 30, 2020 and 50% from June 30, 2019. Our servicing portfolio includes approximately 2.4 million clients and generates more than $1 billion of recurring servicing fee income on an annualized basis
Rocket Companies (RKT) stock price chart since its listing
The image below shows the stock price history of Rocket Companies (RKT) since its listing.. And its not been a good time for Rocket Companies stockholders with the stock decreasing by -15% since its listing
The stock of Rocket Companies is trading at closer to its 52 week low than it is to its 52 week high which is a clear indication that the short term sentiment and momentum of Rocket Companies stock is negative at this point in time.
The stock of Rocket Companies is trading at closer to its 52 week low than it is to its 52 week high which is a clear indication that the short term sentiment and momentum of Rocket Companies stock is negative at this point in time.
Rocket Companies (RKT) stock price forecast
So what do we value the stock of Rocket Companies (RKT) at based on their latest earnings report? Based on their earnings report our stock valuation model provides a target price (full value price) for the stock of Rocket Companies (RKT) at $26.70 a stock.
We usually recommend that long term and fundamental investors get into a stock at least 10% below our target price. Therefore a good entry point into the stock of Rocket Companies stock is at $24 or below.
We usually recommend that long term and fundamental investors get into a stock at least 10% below our target price. Therefore a good entry point into the stock of Rocket Companies stock is at $24 or below.
Next earnings release of Rocket Companies (RKT)
It is expected that Rocket Companies (RKT) will release their 3rd quarter 2021 earnings report in late November 2021
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