RKT - Rocket Companies stock slides as Q4 adjusted revenue seen lower

Rocket Companies ( NYSE: RKT ) stock retreated 7.1% in Thursday after-hours trading as the fintech issued Q4 guidance that called for a Q/Q decline in adjusted revenue as well as closed loan volume, net rate lock volume and gain on sale margins.

The company, which engages in tech-driven real estate, mortgage and e-commerce businesses in North America, expects Q4 adjusted revenue to be $600M-750M compared with the $1.24B consensus.

And as the housing market slows as two-decade high mortgage rates put buyers at a standstill, closed loan volume is expected to fall to $17B-22B in Q4; net rate lock volume to be $15B-21B; and gain on sale margins to be 2.30%-2.60%.

Nevertheless, Rocket ( RKT ) "operates from a position of strength, which is clear from our $8.8 billion of liquidity," and "we are actively investing in the Rocket Platform to attract more consumers, lift conversion and lower client acquisition cost, said Vice Chairman and CEO Jay Farner.

Q3 adjusted EPS of -$0.08, falling short of the average analyst estimate of -$0.03, dropped from $0.57 in the year-ago quarter.

Revenue of $1.3B, topping the $1.08B consensus, slid from $3.12B a year before.

Adjusted EBITDA loss came in at $160M compared with a gain of $1.57B in Q3 of last year.

Closed loan origination volume was $25.58B, down from $88.05B in Q3 2021. Gain on sale margin of 2.69% vs. 3.05% in Q3 2021. And net rate lock volume of $23.75B plunged from $86.71B a year ago.

Subsequent to September 30, RKT repurchased 32.1M shares cumulatively at an average price of $12.75, as of November 2. The board approved a buyback program effective November 11 whereby the company can repurchase shares of its common stock in an aggregate value of up to $1B from time to time in the open market.

Earlier, Rocket Companies Non-GAAP EPS of -$0.08 misses by $0.05, revenue of $1.3B beats by $220M .

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