loanDepot Inc. (NYSE: LDI) shares climbed 32% this week after short-seller-turned-long Citron Research issued a bullish report calling the Irvine-based nonbank “the hidden gem of housing finance.”
The rally comes despite ongoing market concern about mortgage rates, which remain elevated by historical standards. Citron’s note, titled LoanDepot ($LDI) – The Hidden Gem of Housing Finance, argues that the company’s servicing portfolio alone is worth more than double the stock’s current price.
Citron’s Case: Servicing as the Floor
Citron pegs the value of loanDepot’s $116 – 117.5 billion servicing book at $5.50 per share, using peer multiples from Mr. Cooper ($COOP). The report cites data from BTIG’s Mortgage Finance Roundup (Aug. 27, 2025), highlighting:
- 418,000 customers in servicing.
- Strong credit quality, with 79% of FICOs above 680.
- 90% of servicing tied to GSE or Ginnie Mae loans, minimizing credit risk.
“Servicing creates recurring fee income, and each refinance cycle turns those customers into new originations,” Citron wrote, stressing loanDepot’s recapture rate of 70% in Q2 2025 — more than double the industry average of 34% for conventional and 52% for government loans.
Why Investors Are Paying Attention
The bullish call follows Citron’s earlier success with Rocket Mortgage ($RKT), which the firm recommended in May at $11. Rocket now trades around $20 after Wall Street repriced its servicing value. Citron argues the same dynamic is at play with loanDepot.
At Mr. Cooper’s multiple of 1.56%, loanDepot’s servicing book is worth about $1.83 billion. Spread across roughly 330 million shares outstanding, that equates to $5.50 per share. Even modest upside from its origination and technology platform could push valuation toward $6–$6.75, Citron said.
Macro Tailwinds
Citron ties the thesis to what it calls a “war on housing,” predicting that lower rates under a potential Trump administration would ignite purchase and refinance activity. Already, mortgage rates have dropped to an 11-month low, creating pent-up demand.
“With a 70% recapture rate, loanDepot is positioned to capture that wave and effectively print money,” the report states.
Looking Ahead
Citron said its next note will focus on normalized earnings in a healthier rate environment and explore potential acquirers as mortgage industry consolidation accelerates.
For now, Citron maintains that “servicing is the floor” — and that at $5.50–$5.75 per share on peer multiples, loanDepot’s servicing business alone is worth 2.5 times its current stock price.
