Daave “3 and 30” Tepper
Institutional Endowment Investor
Rocket Companies looks expensive against its prior trough: its $34B market cap is about a 25% premium to the $22-27B midpoint for Rocket plus Mr. Cooper at the last rate peak. Long-term earnings power should improve as it takes origination share and refinancing demand returns when rates fall, and Mr. Cooper's servicing book is minting cash. But servicing hedges, rate-volatility sensitivity and falling purchase volumes are uncertain, so adding only makes sense about 20% lower. x.com x.com
Rocket Companies is uninvestable while the 10-year Treasury yield and mortgage rates keep rising. It could be worth owning when the time is right, but it is still too early. x.com
Fair Isaac is cheap for a reason: the government has effectively declared war on it. The FHFA ended its monopoly on mortgage credit scores and put VantageScore on the same pricing grid, and Rocket has already switched. The stock is down 50% this year, and there are better opportunities elsewhere. x.com
Rocket Companies' underlying platform is worth far more than its price, which looks like under 10x earnings power. Its mortgage servicing rights are exposed to rate hikes and credit, and the stock swings with rates, but management can largely shape earnings. @BoxLongs sees a big TAM and notes ValueAct's involvement, with the rate-driven selloff a reload point, though a sharp market drop could take it to $10-12. x.com x.com
Better Home & Finance is now the favorite lending tech company, even over Upstart, though riskier because it is still very early. Its HELOC with a credit card turns home equity into a revolving credit line, making borrowers long-term customers and generating fees, and a Coinbase partnership lets borrowers use bitcoin or USDC as loan collateral. It grows at 40% yet trades at half Upstart's valuation, with fair value estimated at $40-50. x.com
Rocket Companies is positioned for higher mortgage volume as housing loosens and rates may ease. Inventory is up about 5.6% year over year with more flexible sellers, giving purchase originations a runway Rocket's digital scale can absorb. April to June is peak home-sales season, when its fast-close platform is an edge. With rates at 6-6.5% and the MBA projecting about 5.9% by Q4, a dip would reopen refinancing, Rocket's specialty. The median Wall Street target of $22 implies about 55% upside. … Show more
The market looks further ahead than today's weak housing conditions, so Rocket Companies and Zillow look bottomed. Both appear poised for big runs despite how bad the housing market remains. x.com
Rocket Companies is set up to benefit from a short-term bond bounce that would bring down long-end yields. Pension funds' quarterly rebalancing this week should buy bonds and sell stocks, and a 70% priced probability of an October hike leaves room for a bounce. A dovish PCE surprise, which BofA said might come from a methodology change, would add support. Rocket's weekly chart shows a good entry point, and the MOVE bond-volatility index has started to retrace, a good sign. x.com x.com
Rocket Companies is worth buying before the housing cycle turns, meaning the rate of deterioration shifts to a firm bottom and maybe improvement rather than a strong rebound. Housing is in an odd spot for a recovery call. Per investor institLPGP, Rocket is taking share, over-earning on its mortgage servicing book while it waits, and already cutting costs with AI, leaving its long-term earnings power far higher. x.com x.com
Rocket Companies is waking up as rates become friendlier. It sits at its 100-day moving average with room to the high $16s if the yield move continues, and $20 by year end would not be a shock. A reply calls it possibly the play of the year. x.com x.com
