Andrew Left’s Citron Research is making a bold new bet in the housing finance space, framing it as a deep-value play, and one that is likely to play a central role in President Donald Trump’s new housing policy.
LDI is taking a hit from negative sentiment. Get the details here.
A Soldier In The ‘War On Housing’
In a report published on Monday, Citron pitched California-based LoanDepot Inc. (NYSE:LDI) as its new re-rating story in the mortgage finance industry.
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The company estimates its mortgage servicing rights book value alone is worth over $5.50 per share, significantly over its current market price of $3.81 per share. It also says that LoanDepot “WILL be one of Trump's Soldiers in the War On Housing," referring to Trump’s new policies to reignite homeownership, refinancing, and purchase activity.
Citing macro tailwinds, Citron pointed to falling mortgage rates, now at 11-month lows, as a real-time confirmation of its thesis. “When rates move lower, servicing portfolios become rocket fuel,” the firm wrote, highlighting LoanDepot's $117.5 billion servicing portfolio and strong recapture performance.
According to Citron, the company boasts a refinance recapture rate of 70% in Q2 2025, compared to industry averages of 34% for conventional loans and 52% for government-backed loans. “LoanDepot converts its servicing book into originations at double the industry norm,” the report says.
This essentially refers to the rate at which existing mortgage customers refinance via the same lender when the rates begin to drop.
The report emphasized the strength of LoanDepot's book, saying, “LoanDepot is no second-rate player, they have quality loans and a durable business.”
Stock Surges Following Report
After Citron’s report was published on Monday, LoanDepot shares rallied 31.83%, closing at $3.81, but is down 6.44% pre-market.
The report pegs a price target of between $6 and $6.75 per share, which still leaves 77% in upside potential for investors. It is currently up 95.38% year-to-date, and 278% since its 52-week low in May this year.
Shares of LoanDepot score high on Momentum in Benzinga’s Edge Stock Rankings, with a favorable price trend in the short, medium and long terms. Click here for deeper insights into the stock, along with how it compares with peers such as Rocket Companies Inc. (NYSE:RKT).
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