TLDR
- BETR stock rocketed 46% after Eric Jackson called it a potential “350-bagger” investment opportunity
- Jackson compared Better Home & Finance to “Shopify of mortgages” using AI to disrupt $15 trillion industry
- Company operates with 900 employees using automation versus 3,000+ at traditional mortgage lenders
- BETR trades at 1x forward sales while competitor Figure Technologies commands 19x valuation multiple
- Stock volume exploded to 40+ million shares from typical sub-100,000 daily average
Better Home & Finance delivered explosive gains Monday following a bullish endorsement from hedge fund manager Eric Jackson. BETR shares jumped 46% after Jackson’s detailed investment thesis went viral on social media.
The EMJ Capital founder described Better as “the Shopify of mortgages” in his analysis. Jackson predicted the stock could become a “350-bagger” with potential to reach $12,000 per share.
Trading volume spiked to over 40 million shares compared to the typical daily average below 100,000. Multiple volatility halts occurred as retail investors poured into the name following Jackson’s endorsement.
Jackson disclosed his firm holds a long position in Better Home & Finance. He gained credibility with previous calls on Opendoor Technologies that generated massive returns for followers.
The stock opened at $68.79 after closing Friday at $49.98. BETR hit an intraday high above $90 before settling at $67.75 for a 35.5% gain.
AI Technology Powers Efficiency
Better uses artificial intelligence systems to streamline mortgage processing operations. The company’s “Betsy” and “Tinman” AI tools allow it to operate with just 900 employees.
Traditional mortgage lenders typically require over 3,000 employees to handle similar loan volumes. This efficiency advantage creates a competitive moat in the crowded lending space.
Jackson highlighted the AI licensing potential as an additional revenue stream. Better could monetize its technology by selling access to other financial institutions.
The mortgage industry processes over $15 trillion annually, providing massive market opportunity. Better’s technology-first approach positions it to capture share from legacy players.
Valuation Gap Drives Investment Case
Jackson pointed to a stark valuation disconnect between Better and competitors. BETR trades at just 1x forward sales despite faster growth rates.
Newly public Figure Technologies commands a 19x sales multiple with slower expansion. Jackson argued this gap presents an opportunity for BETR to re-rate higher.
Better reported revenue of $44.14 million in its latest quarter, meeting analyst expectations. The company posted an earnings per share loss of $1.99, beating estimates by $0.28.
Wall Street Zen recently upgraded BETR from “sell” to “hold” rating on September 13th. The timing preceded Monday’s massive rally by just over a week.
Jackson projected Better could reach $12 billion in annual revenue by 2028. He outlined three growth drivers: direct consumer lending, institutional partnerships, and AI licensing.
The company’s direct-to-consumer platform allows fully digital mortgage applications. This online approach appeals to younger borrowers comfortable with technology-based financial services.
Better has gained over 700% year-to-date through Monday’s close. The mortgage technology sector has attracted investor interest as companies digitize traditional processes.
Jackson compared current skepticism around Better to early reactions toward Carvana and Opendoor. He noted investors initially dismissed both stocks before they delivered outsized returns.
Institutional ownership stands at 20.94% with recent purchases from Goldman Sachs and Geode Capital Management. Several hedge funds increased positions during the second quarter.
