What happened
UWM Holdings(NYSE: UWMC) saw its stock price surge 16.2% this week, from last Friday's close through 11:00 a.m. EST today, according to S&P Global Market Intelligence. The share price had been up as much as 19.6% during the week. The stock is trading at about $4.83 per share as of Friday morning at 11:00 a.m. EST, up about 46% year to date.
Overall, the markets were up slightly this week: The S&P 500 gained 1.1%, the Dow Jones Industrial Average was up 0.9%, and the Nasdaq Composite was up 1.6% for the week as of this morning at 11:00 a.m. EST.
So what
UWM Holdings is the parent company of United Wholesale Mortgage, the largest wholesale mortgage lender in the U.S.
The company reported its fourth-quarter earnings on Wednesday morning, and while the numbers were all down year over year, it posted better-than-expected revenue of $302.4 million. This was down from $605.5 million a year ago, which should come as no surprise, given that this is the most challenging housing market in more than a decade.
The company had a net loss of $62.5 million, or $0.03 per share, compared to net income of $239.8 million a year ago this quarter.
UWM had $25.1 billion in loan originations, down from $55.2 billion a year ago. Purchase originations were $21.7 billion in the quarter compared to $24.5 billion a year ago.
For the full year 2022, loan originations were down 44% from the previous year to $127 billion, but purchase originations were a record $90.8 billion last year, up from $87.3 billion in 2021.
Refinancings, however, were way down to just $3.5 billion from $30.7 billion in Q4 2021. For the full year, refinancing volume was just $36.5 billion, down from $139.3 billion in 2021.
Now what
We're not expecting a lot of positive news from the housing market in 2023, either; rates, while dropping from highs in October and November, are still averaging well over 6% for 30-year fixed-rate mortgages.
But UWM got a bit of a boost from analyst Bose George at Keefe Bruyette and Woods, who upgraded the stock to market perform from underperform and bumped up the price target to $4 from $3.50, reported the Fly. He cited better-than-expected guidance on gain margin for the first quarter. But still, even with the price target increase, it is still down from current levels.
Unfortunately, it is going to be another difficult year for the housing market and mortgage providers in this cyclical industry.
10 stocks we like better than UWM Holdings
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and UWM Holdings wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of February 8, 2023
Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
