Why Rocket's First-Quarter Earnings Failed to Impress
Mortgage originators tend to not get a lot of respect from Wall Street analysts. The companies are shunned because they operate in highly cyclical business environments, which ebb and flow with changes in interest rates and their direct effect on mortgage rates. Mortgage rates had been dropping steadily throughout 2019 and 2020, but they began to rise again in January of 2021.
Recently, Rocket Companies (NYSE: RKT) reported record first-quarter earnings, and yet the stock sold off heavily on the news. Why did investors slam the company so hard? Was it the recent rise in forecasts on mortgage rates? Or was there something else in the report that caused investor concern?
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Source Fool.com
