Rocket Companies posted earnings on June 10 and bounced 6.7% — yet short interest hit a new high the same day, making the post-print setup more charged than the relief rally suggests.
The short-side story has accelerated since the pre-earnings notes filed last week. SI jumped 8% in a single session on June 9 to reach 9.3% of free float — roughly 89.6 million shares, the highest level in the 30-day window tracked here. That is up 25.6% over the past month, a continuation of the rebuild that was already the dominant theme in the June 3 and June 7 notes. The ORTEX short score has followed, climbing to 52.8 — its highest reading in the recent history and up from 47.6 just two weeks ago. What has not followed is borrow stress. Availability is running at 519%, meaning there are more than five shares available to lend for every two currently borrowed, and cost to borrow remains negligible at 0.44%. Shorts are adding aggressively, but they face no squeeze pressure in the lending market. Options positioning is mildly defensive — the put/call ratio is 0.35, about one standard deviation above its 20-day average of 0.32 — but well off the 52-week high of 0.71, so hedging remains selective rather than broad-based.
The Street remains cautious and somewhat split. The consensus sits at hold, with all recent analyst moves pointing toward target compression rather than conviction either way. JP Morgan cut its target from $24 to $16.50 in early April; Wells Fargo and Barclays followed with their own reductions. More recently Keefe, Bruyette & Woods trimmed from $22 to $21 in mid-May, even while maintaining an Outperform. The mean target of $20.05 is still 52% above the current price of $13.18 — a gap that reflects either deep undervaluation or targets that have not yet fully adjusted to the macro rate environment. The bull case centres on RKT's position as the nation's largest mortgage originator and its acquisition of Mr. Cooper, which would make it the largest servicer as well. The bear case is pointed: the downside target of $14 in the Benzinga bear scenario is essentially where the stock traded before this week's earnings bounce, and bears flag integration risk on Mr. Cooper alongside mortgage volumes that remain rate-sensitive. EV/EBITDA sits at 16.9x, up slightly over the past week, while P/E has compressed to 14.8x — down about 2.2x over 30 days as the price fell faster than earnings estimates.
On factor scores, the tension is visible in the numbers. The 12-month forward EPS growth rank comes in at the 82nd percentile — analysts expect a sharp earnings recovery — but the short score rank is only in the 18th percentile, meaning the short-side pressure is relatively high compared to the broader universe. The analyst recommendation differential scores at an unusually strong 94th percentile, which reflects the gap between current price and target rather than genuine bullish conviction. The dividend score of 91 is almost certainly a legacy artefact of the two special dividends paid in 2021 and 2022; no regular dividend has been declared since, and that score should carry little weight here.
Institutional flows offer one mildly interesting data point. BlackRock added 3.6 million shares as of May 31, and FMR (Fidelity) added 10.1 million shares as of late May — both passive or semi-active managers, so the signal is modest. T. Rowe Price added 11.7 million shares through March 31, a larger conviction move, though the data is now three months stale.
The next scheduled earnings event is July 30. Between now and then, the watch point is whether the post-print short-covering impulse materialises — or whether the 9.3% short interest, already near a recent peak, continues to build as the market digests what Mr. Cooper integration actually costs in the near term.
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