Rocket Companies surges 9% after reporting eye-popping growth in preliminary earnings
- Shares of recently IPO'd Rocket Companies surged as much as 9% on Friday after the company reported strong preliminary second quarter earnings results.
- The mortgage loan company likely benefited from low interest rates, which have led to a boom in refinances, and a rise in demand for homes amid the COVID-19 pandemic.
- Loan origination volume soared 126% year-over-year, while adjusted net income surged nearly 1000% year-over-year, according to the results.
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Rocket Companies seems to have picked a good time to go public as it reports a surge in earnings growth.
The recently IPO'd mortgage loan company has benefited from two major tailwinds in 2020: all-time low mortgage rates, which have led to a boom in refinancing of existing mortgages, and a surge in demand for homes as people flee cities for backyards in the suburbs amid the COVID-19 pandemic.
On Friday, Rocket announced preliminary second quarter earnings, which revealed some eye-popping growth figures for the Ohio-based company.
Here are the key numbers:
Revenue: $5.0 billion, representing year-over-year growth of 437%
Adjusted net income: $2.8 billion, representing year-over-year growth of 995%
Closed loan origination volume: $72.3 billion, representing year-over-year growth of 126%
CEO Jay Farner chalked up the massive growth to Rocket's long-term technology investments, which have enabled the company to quickly scale as it sees a surge in demand for mortgage loans.
Rocket went public on August 6 and witnessed its shares jump as much as 26% in its first day of trading. Shares are up 14% since its opening IPO print of $18.00.
Rocket will host its first earnings call on September 2.
Shares of Rocket were up as much as 9% to $20.43 in Friday trades.
