- RKT stock down 10% on Wednesday.
- Rocket (RKT) up over 100% in a week.
- Rocket (RKT) stock had risen 70% on Tuesday.
Update: RKT shares understandably gave up some ground on Wednesday, as Tuesday had seen stellar gains. RBC downgraded RKT from outperform to sector perform and put a $30 price target on the stock. At the time of writing RKT shares are trading at $37.45 a loss of ten percent. Mortgage data from the US had also seen refinancing deals slow as interest rates rose.
Another day, another short squeeze, retail-induced rally. This must lead to the obvious conclusion that Gamestop rides again! But is that really the case? Maybe not entirely, blow out Q4 results were certainly deserving of a higher rating, but this was another epic move akin to Gamestop.
So for those that don't know what is Rocket? Rocket is a Detroit based company with its stated aim being to help "our clients achieve the dream of homeownership and financial freedom". Rocket has a number of businesses but its main flagship is Rocket Mortgage founded in 1985. The company says on its own website it has $1 trillion originated in home loans and is the US's biggest mortgage lender. Rocket Mortage uses an innovative online platform for mortgage provision and customer interaction. Rocket also has a number of other business in complementary areas such as insurance property valuations, sales, etc. Rocket is the parent company of Quicken Loans.
Stay up to speed with hot stocks' news!
Rocket (RKT) shares launched via IPO in August 2020 at $18 and demand was not as strong as now. Rocket had to reduce the size of its IPO by nearly a third due to lack of demand, according to Reuters.
RKT Stock forecast
The sharp appreciation has its origins with Rocket's Q4 results which were strong. Q4 Earnings per share was $1.14 versus $0.87 expected. Sales were $4.7 billion versus $3.9 billion expected. For Q1 2021 Rocket said it expects a closed loan volume of $100.5 billion which is up 95% from a year earlier!
The results were so good Rocket announced a special dividend of $1.11 per share. Total revenue grew 144% in Q4 year on year.
Post results Jeffries raised its price target for Rocket to $30, Susquehanna raised its price target to $21 but Citigroup lowered its price target to $33.
RKT Stock News
Results were released on Feb 25 after market close. Rocket shares had closed that day at $19.90. On Friday, February 26 RKT shares closed up nearly 10% and on Monday, March 1 RKT shares gained another 11%.
What happened next then looked more like the Gamestop of old. RKT has a high short interest of 30% plus.
Retail traders began heavily discussing Rocket stock on social media, post results, and the genesis of another epic short squeeze was planted. Yesterday that led to gains of over 70% for RKT shares, closing at $41.60. It was the highest volume day ever in RKT shares.
So can it continue? Well if the Gamestop experience is anything to go by this could play out further. Gamestop initially spiked leading to new shorts entering the market but the stock kept going and going for another few days after its initial spike. Can RKT shares do the same? Well, that is the big question. Rocket (RKT) CEO Jay Farner is due to speak at Morgan Stanley's Technology, Media, and Telecom conference on Wednesday morning.
The author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
This article is for information purposes only. The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice. It is important to perform your own research before making any investment and take independent advice from a registered investment advisor.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to accuracy, completeness, or the suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. The author will not be held responsible for information that is found at the end of links posted on this page.
Errors and omissions excepted.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD remained bid above 0.6500
AUD/USD extended further its bullish performance, advancing for the fourth session in a row on Thursday, although a sustainable breakout of the key 200-day SMA at 0.6526 still remain elusive.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.