loanDepot (NYSE:LDI) Announces Quarterly Earnings Results

Key Points

• loanDepot reported a quarterly loss of $0.11 per share, with a negative net margin of 6.51% and return on equity of 22.35%.
• Adjusted net loss narrowed to $29 million from $34 million in the prior quarter, while revenue increased to $308 million and gain-on-sale margins improved to 345 basis points. Management expects third-quarter margins of 360–390 basis points.
• Home equity and purchase lending showed momentum, but cash fell to $229 million, keeping liquidity and upcoming bond maturities as major concerns. Analysts maintain a generally negative outlook, with an average “Reduce” rating and a $2.00 price target.

loanDepot (NYSE:LDI - Get Free Report) released its quarterly earnings results on Tuesday. The company reported ($0.11) earnings per share (EPS) for the quarter, Zacks reports. loanDepot had a negative net margin of 6.51% and a negative return on equity of 22.35%.

Here are the key takeaways from loanDepot's conference call:

• Home equity lending gained traction, with unit volume up 25% sequentially as the company expanded its HELOC and 5x5 Home Loan offerings. Management expects continued growth, citing higher margins, lower production costs, and lower rate sensitivity than traditional mortgage products.
• Second-quarter adjusted net loss narrowed to $29 million from $34 million in the first quarter, while revenue rose to $308 million and gain-on-sale margins improved to 345 basis points from 271 basis points. For the third quarter, loanDepot guided to 360–390 basis points of gain-on-sale margin and somewhat lower expenses.
• The company reported stronger purchase-market momentum, including a 33% increase in purchase market share, an 18% increase in loan officers, and improved marketing efficiency. Management also said its reintroduced wholesale channel is tracking ahead of schedule.
• Cash declined by $48 million sequentially to $229 million, keeping liquidity and upcoming bond maturities as key priorities. Management is pursuing financing alternatives and recently monetized approximately $10 billion of mortgage servicing rights, but the transaction is expected to settle later in the year.

loanDepot Stock Performance

NYSE:LDI traded down $0.01 during mid-day trading on Tuesday, hitting $1.06. 3,711,462 shares of the company traded hands, compared to its average volume of 2,603,488. The stock's fifty day moving average price is $1.15 and its 200-day moving average price is $1.56. loanDepot has a one year low of $0.93 and a one year high of $5.05. The company has a quick ratio of 1.11, a current ratio of 1.11 and a debt-to-equity ratio of 10.26. The firm has a market cap of $359.78 million, a price-to-earnings ratio of -3.13 and a beta of 3.37.

Institutional Inflows and Outflows

Several institutional investors have recently made changes to their positions in the stock. Millennium Management LLC boosted its position in shares of loanDepot by 622.6% in the third quarter. Millennium Management LLC now owns 5,620,553 shares of the company's stock worth $17,255,000 after purchasing an additional 4,842,751 shares during the period. UBS Group AG raised its position in shares of loanDepot by 1,125.1% during the 3rd quarter. UBS Group AG now owns 2,020,027 shares of the company's stock valued at $6,201,000 after purchasing an additional 1,855,136 shares during the period. Wasatch Advisors LP bought a new stake in shares of loanDepot during the 4th quarter valued at $3,229,000. Geode Capital Management LLC lifted its stake in shares of loanDepot by 134.4% during the 2nd quarter. Geode Capital Management LLC now owns 1,925,712 shares of the company's stock valued at $2,446,000 after buying an additional 1,104,021 shares in the last quarter. Finally, Squarepoint Ops LLC lifted its stake in shares of loanDepot by 1,264.5% during the 3rd quarter. Squarepoint Ops LLC now owns 703,939 shares of the company's stock valued at $2,161,000 after buying an additional 652,348 shares in the last quarter. Institutional investors own 39.39% of the company's stock.

Analysts Set New Price Targets

Several brokerages have recently weighed in on LDI. Weiss Ratings reiterated a "sell (d-)" rating on shares of loanDepot in a research note on Friday, July 17th. Wall Street Zen lowered shares of loanDepot from a "hold" rating to a "sell" rating in a research report on Saturday, June 20th. The Goldman Sachs Group reduced their target price on shares of loanDepot from $2.10 to $1.25 and set a "sell" rating for the company in a report on Wednesday, July 15th. Finally, Zacks Research upgraded shares of loanDepot from a "strong sell" rating to a "hold" rating in a research report on Wednesday, July 29th. Three equities research analysts have rated the stock with a Hold rating and two have issued a Sell rating to the company. According to MarketBeat.com, loanDepot presently has an average rating of "Reduce" and an average price target of $2.00.

loanDepot Company Profile

loanDepot, Inc NYSE: LDI is a leading non-bank consumer lender that provides a broad range of home and personal financing products through a digitally enabled platform. The company specializes in originating and servicing purchase and refinance mortgage loans, home equity lines of credit (HELOCs), and personal loans. Through its proprietary mello™ technology suite, loanDepot streamlines the application, underwriting, and closing processes for borrowers and real estate professionals, emphasizing speed, transparency, and a seamless digital experience.

Founded in 2010 by Anthony Hsieh, loanDepot has grown rapidly to become one of the largest independent mortgage lenders in the United States.

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