Freddie Mac (FMCC) AI Stock Analysis

• Market Cap: $7.09B
• Dividend Yield: N/A
• Average Volume (3M): 3.08M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.64
• Revenue Growth: 8.26%
• EPS Growth: 81.01%
• Country: US
• Employees: 8,076
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Mortgages
• EPS (TTM): 0.86
• Shares Outstanding: 650,059,600
• 10 Day Avg. Volume: 2,223,743
• 30 Day Avg. Volume: 3,084,727
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.18
• Price to Sales (P/S): 0.09
• P/FCF Ratio: 1.60
• Enterprise Value/Market Cap: 493.85
• Enterprise Value/Revenue: 154.28
• Enterprise Value/Gross Profit: 69.27
• Enterprise Value/Ebitda: 84.43
• 1Y Price Target: $12.18
• Price Target Upside: 10.83% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 55 Neutral
• Price Target: $10.00 ▼(-9.01% Downside)

Freddie Mac's overall stock score is primarily influenced by its strong financial performance, despite high leverage risks. Technical analysis indicates mixed momentum, with potential overbought conditions. Valuation is a concern due to the negative P/E ratio and lack of dividend yield, which significantly impacts the stock's attractiveness.

Positive Factors

Revenue Growth

Consistent revenue growth indicates Freddie Mac's effective market operations and ability to capitalize on housing market trends, supporting long-term financial stability.

Cash Flow Generation

Strong cash flow generation ensures liquidity and financial flexibility, allowing Freddie Mac to sustain operations and invest in growth opportunities.

Credit Score Competition

Adopting VantageScore could diversify risk assessment, potentially enhancing Freddie Mac's competitive edge in the mortgage market.

Negative Factors

High Leverage

High leverage increases vulnerability to interest rate hikes, potentially impacting Freddie Mac's financial stability and operational flexibility.

Crypto Exposure

Indirect exposure to crypto volatility through shareholder bases could lead to market instability, affecting Freddie Mac's stock performance.

EBIT Margin Volatility

Fluctuations in EBIT margin suggest potential challenges in maintaining consistent operating efficiency, impacting long-term profitability.

Freddie Mac Business Overview & Revenue Model

Company Description

Federal Home Loan Mortgage Corporation operates in the secondary mortgage market in the United States. The company purchases single-family and multifamily residential mortgage loans originated by lenders, as well as invests in mortgage loans and mortgage-related securities. It operates through two segments, Single-family and Multifamily. The Single-family segment purchases, securitizes, and guarantees single-family loans; and manages single-family mortgage credit risk, as well as manages mortgage-related investments portfolio, single-family securitization activities, and treasury functions. This segment serves mortgage banking companies, commercial banks, regional banks, community banks, credit unions, housing finance agencies, savings institutions, and non-depository financial institutions. The Multifamily segment engages in the purchase, sale, securitization, and guarantee of multifamily loans and securities through the issuance of multifamily K and SB certificates; issuing and guarantying other securitization products; issuing other credit risk transfer products; and provision of other mortgage-related guarantees. It serves banks and other depository institutions, insurance companies, money managers, central banks, pension funds, state and local governments, real estate investment trusts, brokers and dealers, and a range of lenders. The company was founded in 1970 and is headquartered in McLean, Virginia.

How the Company Makes Money

Freddie Mac generates revenue primarily through its purchase and securitization of mortgages, which involves buying loans from lenders and converting them into MBS that are sold to investors. The company earns money from the difference between the interest income on the mortgages it holds and the interest it pays on the MBS it issues. Additionally, Freddie Mac collects guarantee fees from lenders for the credit risk associated with the mortgages it guarantees, which is a significant source of revenue. The company also benefits from various partnerships with financial institutions and government entities that help facilitate its operations and expand its market reach. Factors such as the overall health of the housing market, interest rates, and regulatory changes also play a critical role in influencing Freddie Mac's earnings.

Freddie Mac Financial Statement Overview

Summary

Freddie Mac demonstrates strong profitability and revenue growth, supported by effective cost management. However, the high leverage typical of the mortgage industry poses a risk if economic conditions worsen. Cash flow generation is solid, though historical volatility suggests the need for careful liquidity management.

Income Statement

Freddie Mac's income statement shows a solid performance with a consistent revenue growth trajectory, albeit at a slower pace recently. The company maintains a healthy gross profit margin and a strong net profit margin, indicating efficient cost management. However, the EBIT margin has shown some volatility, which could suggest fluctuations in operating efficiency.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio, typical for the financial industry, but it poses a risk if interest rates rise. The return on equity remains strong, demonstrating effective use of shareholder funds. The equity ratio is relatively low, indicating a heavy reliance on debt financing, which could be a concern if market conditions change.

Cash Flow

Freddie Mac's cash flow statement indicates robust free cash flow generation, with a positive growth rate in the most recent period. The operating cash flow to net income ratio suggests that cash generation is aligned with reported earnings, enhancing reliability. However, historical fluctuations in free cash flow growth highlight potential volatility in cash generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	22.68B	23.44B	22.10B	19.42B	22.99B	15.21B
Gross Profit	50.51B	23.44B	22.10B	19.42B	22.99B	15.21B
EBITDA	41.45B	14.78B	13.20B	11.60B	15.20B	9.23B
Net Income	11.18B	11.86B	10.54B	9.33B	12.11B	7.33B
Balance Sheet
Total Assets	3.47T	3.39T	3.28T	3.21T	3.03T	2.63T
Cash, Cash Equivalents and Short-Term Investments	88.48B	61.30B	5.04B	12.19B	12.47B	21.88B
Total Debt	3.38T	3.30T	3.21T	3.16T	2.98T	2.59T
Total Liabilities	3.40T	3.33T	3.23T	3.17T	3.00T	2.61T
Stockholders Equity	67.60B	59.58B	47.72B	37.02B	28.03B	16.41B
Cash Flow
Free Cash Flow	15.89B	6.63B	7.62B	11.93B	16.35B	907.00M
Operating Cash Flow	15.89B	6.63B	7.62B	11.93B	16.35B	907.00M
Investing Cash Flow	-13.54B	9.62B	44.25B	11.40B	24.25B	-83.36B
Financing Cash Flow	-2.58B	-16.74B	-52.21B	-27.11B	-54.34B	101.15B

Freddie Mac Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.99
• 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 10.99 is above the 20-day moving average (MA) of 9.72, above the 50-day MA of 10.25, and above the 200-day MA of 8.18, indicating a bullish trend. The MACD of 0.30 indicates Negative momentum. The RSI at 58.02 is Neutral, neither overbought nor oversold. The STOCH value of 72.00 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
PFSI	69 Neutral	$6.59B	13.66	12.55%	0.91%	25.42%	190.85%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
COOP	65 Neutral	―	―	―	―	2.27%	-17.46%
FMCC	55 Neutral	$7.09B	―	18.03%	―	8.26%	81.01%
RKT	54 Neutral	$53.47B	242.32	-2.15%	―	22.56%	―
UWMC	52 Neutral	$8.98B	―	11.37%	7.18%	-8.66%	―
LDI	47 Neutral	$936.39M	―	-25.72%	―	3.91%	27.78%

Freddie Mac Corporate Events

Freddie Mac Launches Tender Offer for STACR Notes

On October 9, 2025, Freddie Mac announced the commencement of a fixed-price cash tender offer for the purchase of certain STACR Notes. The offer, managed by Wells Fargo Securities, Cantor Fitzgerald, and CastleOak Securities, will expire on October 16, 2025, unless extended. This move is part of Freddie Mac’s strategy to manage its credit risk exposure and could impact stakeholders by potentially altering the market dynamics of these securities.

Freddie Mac’s Interim CEO to Continue Until December

On September 19, 2025, Michael T. Hutchins informed Freddie Mac that he will continue in his roles as President and Interim CEO until a permanent CEO is appointed or until December 19, 2025. This decision ensures leadership continuity at Freddie Mac during the ongoing search for a permanent CEO, potentially impacting the company’s strategic direction and stability.