The day after United Wholesale Mortgage (UWM) announced its Q4 and 2020 earnings were up by 715% and 821% respectively year over year, the company’s stock dipped by as much as 10%. While the stock has fluctuated somewhat since, as of market close on February 11, it remained at $9.20 a share, below its $10 IPO price. Though it might defy traditional logic to see a company’s stock suffer after record earnings, that is the position the country’s second-largest nonbank lender finds itself in.

Mat Ishbia (pictured), president & CEO of United Wholesale Mortgage, told MPA what that early dip means for UWM and shared why the stock is currently below the valuation experts have given the company. He stressed that these fluctuations in the stock price have no material impact on UWM’s day to day operations, or the company’s lofty goals to rebuild the broker channel and help brokers capture greater market share. 

“We have continued to a great quarter and an amazing year,” Ishbia said. “This year, hopefully, the expectation is to have the best year of all time from a mortgage volume perspective. I don’t follow the share price daily or hourly like a lot of people do. We focus on the best fundamental business we have…the stock price will follow, it doesn’t lead.”

Where some investment experts have noted market wariness around the cyclical nature of the mortgage industry, possibly explaining this dip at an end to the refi boom, Ishbia doesn’t believe this outlook is behind the recent stock drop. The stock’s IPO price, he explained, was tied to a normal year, rather than the record volume of 2020. He’s confident the stock will rise into the $12.50-$13.50 range analysts from Wedbush and JMP have predicted. In the meantime, he’s focusing on the business.

From a broker’s perspective, Ishbia emphasized that no stock market fluctuation, be it up or down, will interrupt UWM’s work in the broker channel. He emphasized that he got to this place by staying focused on UWM’s operations and building the broker channel, the goals he laid out before UWM went public are still what he plans to achieve.

“We’re going to get the broker share up, we are going to educate people, we are going to double down on technology and the broker channel is going to grow,” Ishbia said. “The stock price being at $20 today, or $9 today, or $5 today, has zero impact on that at all.”

He’s especially confident in ignoring these market fluctuations because UWM is still outperforming in earnings expectations. He noted that the story would be somewhat different if UWM underperformed and its stock took a hit. Having only gone public three weeks ago, he attributes some of these fluctuations to his stock “settling in” to the market. He expects that when UWM pays its first dividend on April 06, and releases more earnings reports, the market will be pricing the strength he sees in his company.

In the meantime, Ishbia emphasized that brokers and originators should be assessing UWM on its turnaround times and scale rather than its stock price. He noted that investors looking at his company right now, might be getting a deal.

“It’s the same great company it’s always been,” Ishbia said. “[Investors] might be getting the stock on sale based on our dividend, our performance, and the fundamentals of our business… That will all come to fruition in a matter of time, right now the stock is a great opportunity because it follows the success of the business.”