loanDepot, Inc. (LDI): A Bull Case Theory

We came across a bullish thesis on loanDepot, Inc. on wallstreetbets subreddit by PaperHandsTheDip. In this article, we will summarize the bulls’ thesis on LDI. loanDepot, Inc.'s share was trading at $2.7100 as of December 1st. LDI’s forward P/E was 26.95 according to Yahoo Finance.

LoanDepot, Inc. (LDI) is a leading U.S. mortgage originator and refinancer that issued around $30 billion in loans last year, down from approximately $100 billion in 2020. The decline reflects cyclical headwinds from rising interest rates rather than fundamental weakness. As a major player in the mortgage refinancing space, LDI’s business naturally contracts when rates rise but expands significantly when they fall, creating a leveraged upside to any sustained easing cycle. With eventual rate cuts, refinancing activity could surge, driving a recovery in loan volumes and profitability. This dynamic offers substantial optionality for investors anticipating a normalization in monetary policy over the next few years.

Operationally, the company maintains a strong presence, operating in 20 countries with roughly 5,000 employees and a market capitalization near $2 billion. It is well-regarded by customers for its quick, low-friction process and competitive rates. The stock, which traded above $30 during the low-rate environment of 2021, could materially rerate once macro conditions turn favorable. Concerns over insider selling appear overstated, as the CEO’s compensation is heavily equity-based and overall insider ownership remains high at approximately 85%, signaling strong alignment with shareholders.

Despite limited financial deep-dive analysis, the investment thesis rests on rate cyclicality and market mispricing of recovery potential. The current environment offers a contrarian entry point with asymmetric upside once rate pressures subside and refinancing demand rebounds, making LDI a high-conviction position for investors comfortable with macro-driven cyclicality.

Previously we covered a bullish thesis on Rocket Companies, Inc. (RKT) by Unemployed Value Degen in December 2024, which highlighted its potential to benefit from a home equity loan boom as rates decline. The company’s stock has appreciated approximately by 43.22% since our coverage as refinancing optimism returned. The thesis still stands. PaperHandsTheDip shares a similar but emphasizes on loanDepot’s cyclical leverage and refinancing upside.

LoanDepot, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 8 hedge fund portfolios held LDI at the end of the second quarter which was 14 in the previous quarter. While we acknowledge the potential of LDI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.