According to Renaissance Capital, at the midpoint of the indicated price range, LoanDepot should command a market valuation of $6.5 billion. In 2015, the company filed for an IPO but canceled it a few hours before pricing due to market conditions not looking good. At the time, it was seeking a market valuation of $2.4 billion–$2.6 billion. The current valuation represents a 160 percent premium to its anticipated valuation back in 2015. However, many things have changed since then—in 2020, on the back of low-interest rates and pandemic-driven interest in home loans, the company reaped strong profits.
At a market value of $6.5 billion, LoanDepot would trade at a price-to-sales multiple of 1.5x based on the midpoint of the company’s estimated 2020 sales. In comparison, Rocket Companies (RKT), Home Point Capital, and Guild Holdings have price-to-sales multiples of 3.2x, 1.4x, and 0.64x, respectively. Although LoanDepot’s 1.5x valuation is lower than market leader RKT’s, it still looks reasonable.
Rocket Companies and Guild Holdings have also gone public recently. In its IPO in Aug. 2020, Rocket priced its stock at $18. However, it had to downsize its IPO to $1.8 billion from $3.3 billion. Currently, RKT is trading at $21.60 per share.
View more information: https://marketrealist.com/p/buy-loan-depot-ipo-stock/