Rocket Companies jumps 20% after revenue growth surges in its fourth-quarter earnings report

• Rocket Companies is a Detroit-based holding company that operates tech-driven businesses like Rocket Mortgage, Rocket Auto, Amrock, and others.
• The company posted 144% revenue growth in the fourth quarter amid booming sales across the board.
• Management was so pleased with the results they decided to give shareholders a special dividend of $1.11 per share.

Rocket Companies stock surged as much as 20% on Friday before paring gains after the company posted 144% year-over-year revenue growth in its fourth quarter earnings release.

Rocket Companies is a Detroit-based holding company that operates tech-driven real estate, mortgage, and e-commerce businesses like Rocket Mortgage, Amrock, Rocket Homes, and Rocket Auto.

The company went public back in August of 2020 in a disappointing IPO that raised $1.8 billion, falling far short of the $3.3 billion the company had targeted.

Shares of Rocket Companies fell slightly through the end of 2020 after a rise to over $30 per share last September.

Rocket Companies posted a stand-out quarter on Thursday after the bell. The holding company beat analyst earnings and revenue estimates significantly, turning in GAAP earnings per share of $1.09 and revenues of $4.78 billion.

"Rocket Companies' record-breaking fourth quarter and full-year 2020 results demonstrate the sheer power of the technology platform we have built and refined for more than two decades," said Jay Farner, Rocket Companies' vice chairman and CEO.

The company also declared a special dividend of $1.11 per share, saying "we are delighted to share our success with those who have supported our vision."

Rocket Companies posted over 200% annual revenue growth in 2020 and increased its net income by an eye-popping 948%, hitting $2.8 billion versus just $754 million in 2019.

"In the midst of a pandemic, we successfully drove growth in every segment of our business, while never losing focus on meeting the needs of our team members, clients, and communities," Farner said.

All of the major segments of Rocket Companies' business thrived in 2020 amid a growing stay-at-home audience.

Rocket Auto sold 2,000 more units in the fourth quarter of 2020 than in the year-ago period. Amrock's title insurance business saw monumental growth with settlement services jumping to $448.2 million vs. $197.9 million in the fourth quarter of 2019. And Rocket Companies' platform generated 153 million unique visitors in 2020, up 61% from 2019.

Rocket Companies traded at 3x sales and just 6.24x earnings on Friday during premarket hours. For reference, the current S&P500 10-year P/E ratio is 35.3.

Rocket held a short interest float of about 38% prior to Thursday's earnings release.

The stock traded up 11.94% at 10:20 a.m. ET on Friday.