Friday, September 14, 2012

Ellie Mae ( Nasdaq - ELLI ) -- Mortgage Rates to Stay Low

Ellie Mae (ELLI $28.00) appears on track to produce excellent on target Q3 results.  Future performance is apt to remain robust, as well, following the Federal Reserve's decision to artificially reduce mortgage interest rates.  Approximately 65%-70% of Ellie Mae's business now is accounted for by refinancing.  If rates had been allowed to rise there was a possibility the company's unit volume might have slowed down as refinancing activity moderated.  Business continued to boom in the September period before the Federal Reserve got involved.  Ellie Mae continued to add new customers, and it continued to generate higher revenues from the ones it already had.  The company now generates 25%-30% of all the mortgages written America.  That percentage is likely to keep rising as Ellie Mae becomes the industry standard.  Average revenue per loan is likely to continue rising, as well.  Our estimates are unchanged.

( Click on Table to Enlarge )

1 comment:

  1. The lower the mortgage rates, the more people well likely to do refinance. Based on the data by Ellie Mae, it could be determined that the mortgage rates are constantly low resulting to have numbers of customers lately.