Why Rocket Companies Shares Are Falling

Rocket Companies Inc RKT shares are trading lower Wednesday after the company announced financial results.

Rocket Companies said first-quarter revenue declined 41% year-over-year to $2.7 billion. First-quarter adjusted revenue totaled $1.93 billion, which was down from $4.04 billion year-over-year. The company reported quarterly adjusted earnings of 15 cents per share, which was down from 91 cents per share year-over-year.

Rocket Companies said closed loan originations totaled $53.98 billion in the first quarter, which was down from $103.53 billion in the prior year quarter.

Rocket expects closed loan volume to be between $35 billion and $40 billion in the second quarter. Net rate lock volume is expected to be between $31 billion and $38 billion. 

Analyst Assessment: 

• Wells Fargo analyst Donald Fandetti maintained Rocket with an Equal-Weight rating and lowered the price target from $13 to $8.
• Citigroup analyst Arren Cyganovich downgraded Rocket from a Buy rating to a Neutral rating and lowered the price target from $14 to $8.

See Also: Rocket Companies Q1 Earnings Takeaways: Revenue And EPS Fall, Refinances And Cash-Out Mortgages See Strength

RKT Price Action: Rocket Companies shares are making new 52-week lows on Wednesday.

The stock was down 9.09% at $7.10 at time of publication.

Photo: Erik Drost from Flickr.