TLDR
- Rocket Companies (RKT) jumped over 8% in extended trading as retail traders piled into the stock
- The stock has gained nearly 20% over the past seven days with year-to-date gains of approximately 50%
- Short interest stands at nearly 49%, fueling speculation about a potential short squeeze
- Retail chatter on Stocktwits surged 740% over the past week with sentiment in ‘extremely bullish’ territory
- Company reports Q2 earnings on July 31 with revenue guidance between $1.175 billion and $1.325 billion
Rocket Companies found itself at the center of retail trading attention Tuesday as shares climbed over 8% in extended trading. The mortgage company became the top-trending ticker on Stocktwits as individual investors loaded up on shares.
The surge in retail interest has been dramatic. Chatter about RKT on Stocktwits jumped 740% over the past week. Sentiment reached ‘extremely bullish’ territory while message volume hit ‘extremely high’ levels.
Short interest data helps explain the excitement. Nearly 49% of RKT’s float is currently sold short according to Koyfin data. This high short interest percentage has traders speculating about a potential short squeeze.
The stock has delivered strong returns recently. RKT gained nearly 20% over the past seven trading days. Year-to-date gains now sit at approximately 50%.
Reddit’s r/wallstreetbets forum also picked up on the momentum. Posts about the stock appeared on the influential trading community with one user writing “Going in on Rocketship.”
Meme Stock History Repeats
This isn’t RKT’s first rodeo with meme stock status. The company experienced a massive rally on March 2, 2021, when shares surged 71% in a single day. That move added $34 billion to the company’s market value before shares crashed the following trading session.
One Stocktwits user predicted RKT could surpass its all-time highs from the 2021 meme stock frenzy. The optimism reflects broader retail enthusiasm for potential squeeze plays.
The current setup mirrors classic meme stock characteristics. High short interest combined with retail coordination creates conditions that can lead to explosive price moves.
Earnings and Acquisition Impact
RKT is scheduled to report second quarter earnings on July 31. The company has provided revenue guidance between $1.175 billion and $1.325 billion for the quarter.
First quarter results showed mixed performance. RKT swung to a net loss of $212 million from a $291 million profit in the same period last year. Total revenues dropped 25% to $1.037 billion from $1.384 billion year-over-year.
Recent acquisitions have analysts optimistic about future growth. RKT completed multi-billion-dollar deals to acquire Mr. Cooper and Redfin earlier this year.
Jefferies analysts noted the two acquisitions will drive average earnings per share accretion of 37% over 2026-27. This fundamental backdrop provides additional support for the retail trading thesis.
The mortgage company continues building its share price momentum heading into the earnings announcement. Tuesday’s after-hours gains extended a four-day winning streak that has captured retail trader attention.
For the fourth consecutive trading day Monday, RKT added 7.51% to close at $15.04 per share as investors positioned ahead of the July 31 earnings release.
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