Freddie Mac (FMCC) AI Stock Analysis

• Market Cap: $3.73B
• Dividend Yield: N/A
• Average Volume (3M): 4.01M
• Price to Earnings (P/E): 3587.5
• Beta (1Y): 0.57
• Revenue Growth: 11.89%
• EPS Growth: N/A
• Country: US
• Employees: 8,076
• Sector: Financial
• Sector Strength: 81
• Industry: Financial - Mortgages
• EPS (TTM): <0.01
• Shares Outstanding: 650,059,600
• 10 Day Avg. Volume: 3,666,577
• 30 Day Avg. Volume: 4,013,689
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.15
• Price to Cash Flow (P/CF): 0.20
• P/FCF Ratio: 0.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $3.25
• Price Target Upside: -43.38% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2

Freddie Mac's strong financial performance and strategic leadership changes contribute positively to its stock evaluation. However, technical signals are mixed, and the very high P/E ratio raises concerns about overvaluation. These factors balance to an overall moderate score.

Freddie Mac Business Overview & Revenue Model

Company Description

Freddie Mac (FMCC), officially known as the Federal Home Loan Mortgage Corporation, is a government-sponsored enterprise (GSE) operating in the United States financial services sector. Established in 1970, Freddie Mac's primary mission is to expand the secondary mortgage market by purchasing mortgages from lenders, thereby providing liquidity, stability, and affordability to the U.S. housing market. The company primarily deals with residential mortgage loans and mortgage-backed securities (MBS), playing a pivotal role in supporting homeownership and rental housing markets.

How the Company Makes Money

Freddie Mac generates revenue primarily through its securitization activities, where it purchases mortgage loans from lenders, pools them, and sells them as mortgage-backed securities (MBS) to investors. This process provides lenders with capital, enabling them to originate more loans. Freddie Mac earns fees for guaranteeing the timely payment of principal and interest on these securities, which is a significant source of revenue. Additionally, the company invests in mortgage loans and MBS for its own portfolio, generating interest income. Freddie Mac also benefits from partnerships with various financial institutions and government agencies, which help facilitate its operational and revenue-generating activities.

Freddie Mac Financial Statement Overview

Summary

Freddie Mac demonstrates strong financial health with robust revenue and net income growth. The company's debt-free position enhances its stability, although its low equity ratio suggests high leverage which may pose risks in unfavorable market conditions. Cash flows remain stable but indicate potential room for improvement in cash conversion efficiency.

Income Statement

Freddie Mac has shown impressive revenue growth with a recent increase from $22.1 billion to $23.9 billion, representing an 8.2% growth rate. The net profit margin has expanded significantly, reaching 74% in the latest report, indicating strong profitability. However, the absence of EBIT and EBITDA margins in the most recent report limits the analysis of operational efficiency.

Balance Sheet

The balance sheet is strong with zero total debt reported in the latest period, reflecting excellent leverage management. The equity ratio stands at 1.76%, which is low, indicating high asset leverage. Return on equity is robust at 29.7%, showcasing effective equity utilization. However, the low equity ratio could pose risks during economic downturns.

Cash Flow

Freddie Mac's cash flow exhibits stability with consistent free cash flow, though it showed a decrease from $7.6 billion to $6.6 billion year over year. The operating cash flow to net income ratio is relatively low, suggesting potential challenges in converting profits into cash.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
23.91B	22.10B	21.26B	21.95B	16.66B
	Gross Profit
23.91B	21.23B	21.26B	21.95B	16.66B
	EBIT
-225.84B	20.50B	77.06B	15.20B	9.23B
	EBITDA
0.00	0.00	77.06B	15.20B	9.23B
	Net Income Common Stockholders
11.86B	10.54B	9.33B	12.11B	7.33B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
61.30B	5.04B	12.19B	12.47B	21.88B
	Total Assets
3.39T	3.28T	3.21T	3.03T	2.63T
	Total Debt
3.30T	3.21T	3.15T	2.98T	2.59T
	Net Debt
3.30T	3.21T	3.14T	2.97T	2.59T
	Total Liabilities
3.33T	3.23T	3.17T	3.00T	2.61T
	Stockholders Equity
59.58B	47.72B	37.02B	28.03B	16.41B
Cash Flow		Free Cash Flow
6.63B	7.62B	11.93B	16.35B	907.00M
	Operating Cash Flow
6.63B	7.62B	11.93B	16.35B	907.00M
	Investing Cash Flow
9.62B	44.25B	11.40B	24.25B	-83.36B
	Financing Cash Flow
-16.74B	-52.21B	-27.11B	-54.34B	101.15B

Freddie Mac Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.74
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FMCC, the sentiment is Positive. The current price of 5.74 is above the 20-day moving average (MA) of 5.23, above the 50-day MA of 5.57, and above the 200-day MA of 2.76, indicating a bullish trend. The MACD of 0.13 indicates Negative momentum. The RSI at 54.20 is Neutral, neither overbought nor oversold. The STOCH value of 70.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FMCC.

Freddie Mac Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AGNC	69 Neutral	$8.72B	10.24	9.58%	15.13%	384.69%	963700.00%
RITM	69 Neutral	$5.93B	6.81	12.59%	8.60%	25.16%	52.40%
NLY	68 Neutral	$11.95B	12.75	8.40%	12.58%	13.33%	―
FMCC	66 Neutral	$3.73B	3,587.50	22.10%	―	11.89%	―
Sector *	64 Neutral	$14.24B	10.27	8.97%	4.33%	16.38%	-11.94%
TWO	62 Neutral	$1.37B	5.57	13.74%	13.63%	28.33%	―
FNMA	62 Neutral	$7.76B	13,400.00	19.70%	―	7.43%	―

Freddie Mac Corporate Events

Freddie Mac Appoints Michael Parrott to Board

On March 24, 2025, Grace A. Huebscher resigned from the Freddie Mac Board of Directors, where she was Chair of the Risk Committee and a member of several other committees. Subsequently, on March 28, 2025, Michael Parrott was appointed to the Board by the U.S. Federal Housing Finance Agency, acting as Conservator. This change in the board’s composition may impact Freddie Mac’s governance and strategic direction.

Freddie Mac Announces Board Changes with New Appointment

On March 19, 2025, Christopher E. Herbert resigned from the Freddie Mac Board of Directors, where he was the Chair of the Mission and Housing Sustainability Committee. On the same day, the Federal Housing Finance Agency appointed David Farbman to the board as a non-executive director, with compensation details outlined in Freddie Mac’s 2024 Annual Report. This change in the board’s composition may influence Freddie Mac’s strategic direction and governance.

Freddie Mac Appoints Michael Hutchins as Interim CEO

On March 20, 2025, the Federal Housing Finance Agency appointed Michael T. Hutchins as the Interim Chief Executive Officer of Freddie Mac, while he continues his role as President. Hutchins, who has been with the company since 2013, brings extensive experience in financial services to his expanded role. Concurrently, the company announced the departure of CEO Diana Reid, who also stepped down from the Board of Directors, marking a significant leadership transition for Freddie Mac.

Freddie Mac Appoints New Board Chair and Members

On March 17, 2025, the Federal Housing Finance Agency appointed four new members to the Freddie Mac Board, including William J. Pulte as Board Chair. This change in leadership, which also involved the removal of six existing board members, is expected to impact Freddie Mac’s governance structure and strategic direction.

Freddie Mac Announces Tender Offer for STACR Notes

On February 3, 2025, Freddie Mac announced a fixed-price cash tender offer to purchase certain Structured Agency Credit Risk (STACR) Notes. The tender offer, involving multiple tranches of notes, will run until February 7, 2025, and is managed by BofA Securities, Inc., Morgan Stanley & Co. LLC, and Academy Securities, Inc. The offer reflects Freddie Mac’s strategic move to manage its credit risk exposure and potentially optimize its financial operations, impacting investors and stakeholders involved in the mortgage credit market.

Freddie Mac Appoints Jane Prokop to Board

Freddie Mac announced the appointment of Jane E. Prokop to its Board of Directors, effective January 2, 2025. With nearly three decades of experience in the financial services sector, including fintech and business financing, Prokop is expected to bring strategic insights and technological expertise to the board, supporting Freddie Mac’s mission to enhance the housing market and its strategic objectives.

Freddie Mac Names James Whitlinger as New CFO

Freddie Mac has appointed James Whitlinger as Executive Vice President and Chief Financial Officer, effective January 1, 2025. Whitlinger, who has over 30 years of experience in financial management and accounting, has been with Freddie Mac for a decade, previously serving as Senior Vice President and Single-Family CFO. His appointment is expected to maintain stability and continuity in Freddie Mac’s finance operations. The terms of his employment include a total compensation package with a significant performance-based component, indicating an emphasis on meeting corporate and individual performance goals. This leadership transition is seen as a strategic move to strengthen Freddie Mac’s position in the real estate finance industry.