What happened

Shares of Ellie Mae (NYSE:ELLI) soared more than 20% last month, according to data provided by S&P Global Market Intelligence, as the stock rebounded from its December lows.

So what

Coming into January, Ellie Mae's stock price was in a major downtrend. The company had lost a third of its value following the release of its third-quarter earnings report. Rising mortgage rates and a low supply of homes for sale were dampening demand for mortgages. In turn, Ellie Mae's Q3 revenue fell short of Wall Street's expectations, and the company cut its full-year financial guidance. 

However, investors began to take a more optimistic view of Ellie Mae's prospects in early January, following comments from Federal Reserve Chairman Jerome Powell, suggesting that the central bank will take a more patient approach to interest rate increases. Lower rates could help to boost demand for mortgages, and, by extension, Ellie Mae's sales and profits. 

A person handing another person keys to a home.

More mortgages could mean more profits for Ellie Mae -- and its shareholders. Image source: Getty Images.

Now what

Ellie Mae shares are up another 10% so far in February. Rumors are swirling that the mortgage software leader could be an acquisition target for a private equity firm. It's possible that management will provide an update on the situation during its fourth-quarter earnings conference call on Feb. 14. A transcript of the call will also be available here.

Check out Ellie Mae's Q3 earnings call transcript.

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