Freddie Mac (FMCC) AI Stock Analysis

• Market Cap: $3.17B
• Dividend Yield: N/A
• Average Volume (3M): 3.10M
• Price to Earnings (P/E): 3.1
• Beta (1Y): 0.86
• 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: 2,510,705
• 30 Day Avg. Volume: 3,095,969
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.47
• Price to Sales (P/S): 0.25
• P/FCF Ratio: 1.69
• Enterprise Value/Market Cap: 1.07K
• Enterprise Value/Revenue: 25.67
• Enterprise Value/Gross Profit: 25.67
• Enterprise Value/Ebitda: 27.94
• 1Y Price Target: $16.00
• Price Target Upside: 227.87% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 3.59
• Revenue Forecast (FY): $23.32B

• Rating: 64 Neutral
• Price Target: $5.00 ▲(2.46% Upside)
• Action: Reiterated Date: 03/19/26
• Date: Action: Reiterated 03/19/26

The score is supported by strong earnings power and a low P/E valuation, but is meaningfully reduced by weak technicals (price well below key moving averages, bearish MACD) and balance-sheet risk/comparability concerns due to historically high leverage and a sharp reported capital structure shift in 2025.

Positive Factors

High profitability and net margins

Freddie Mac’s consistently very high net margins and a meaningful rise in net income to $16.0B in 2025 indicate durable earnings power from guarantee fees and portfolio returns. Strong margins and reported ROE near 20%–25% support long-term capacity to absorb credit cycles and fund operations.

Improved cash generation in 2025

A large increase in operating cash flow and reported free cash flow growth in 2025 materially strengthens the company’s ability to fund guarantees, meet funding obligations, and build regulatory capital buffers. Better cash generation enhances financial flexibility over the medium term versus prior years.

Essential GSE franchise and market role

As a government-sponsored enterprise focused on the conventional mortgage market, Freddie Mac operates a mission-critical model that creates persistent demand for guarantees and MBS intermediation. Long-term lender relationships and systemic role afford structural revenue visibility and market access.

Negative Factors

Historically extreme leverage and abrupt 2025 shift

Freddie Mac’s historical leverage levels were extremely high, which elevates solvency and funding risk in stress scenarios. The sharp reported deleveraging in 2025 materially alters comparability and may reflect accounting, regulatory or structural changes that introduce uncertainty about durable balance-sheet mechanics.

Volatile cash flows and inconsistent cash conversion

Operating and free cash flows have shown large swings historically, with inconsistencies in cash conversion and one-year reporting anomalies. Persistent volatility complicates forecasting of funding for guarantee obligations and portfolio needs, reducing reliability of internal capital planning over the medium term.

Conservatorship and regulator control over governance

Ongoing FHFA conservatorship gives the regulator direct control over governance and compensation, constraining management autonomy and strategic flexibility. This structural oversight can limit operational decision-making, capital-return policies, and long-term reforms that would otherwise optimize risk/return.

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 makes money primarily by (1) earning guarantee fees for taking on mortgage credit risk and (2) earning net interest income and investment income from its retained mortgage-related portfolio. 1) Guarantee fees (credit guarantee business): A core part of Freddie Mac’s model is to buy or aggregate eligible mortgages and issue (or guarantee) MBS backed by those mortgages. Investors in the MBS receive principal and interest payments, while Freddie Mac provides a guarantee against credit losses from borrower defaults (subject to the terms of the guarantee). For providing this credit protection and related services (e.g., securitization, security administration), Freddie Mac earns ongoing guarantee fees (often referred to as “g-fees”), which are typically based on a percentage of the outstanding unpaid principal balance of the guaranteed mortgages. This revenue stream is closely tied to the size and credit characteristics of Freddie Mac’s “guarantee book of business,” the level of new mortgage acquisitions, and pricing/competition in the conforming mortgage market. 2) Net interest income and investment income (retained portfolio): Freddie Mac holds a portfolio of mortgage-related assets (e.g., mortgages, agency MBS, and other mortgage investments) and finances these holdings largely through debt issuance. It earns interest and investment income on the assets and pays interest on its funding liabilities; the spread between asset yields and funding costs (after hedging and expenses) contributes to net interest income. Portfolio results depend on interest rate levels and volatility, prepayment speeds, funding conditions, and hedging effectiveness. 3) Credit risk transfer (CRT) and other income/expense effects: Freddie Mac uses credit risk transfer transactions (including certain securities and reinsurance-style arrangements) to share mortgage credit risk with private investors. CRT can affect earnings through premiums received/paid, changes in the fair value of CRT-related instruments, and how much credit loss is retained versus transferred. Freddie Mac also recognizes credit loss-related expenses (or recoveries) tied to expected and realized mortgage performance, which can materially influence profitability. 4) Key factors influencing earnings: Earnings are driven by mortgage origination and refinance volumes (which affect acquisitions and guarantees), home price trends and employment/borrower performance (which affect credit losses), interest rate movements and yield-curve dynamics (which affect portfolio spreads and hedging results), and regulatory/charter-related constraints (including limits and requirements applicable to GSE operations). Significant lender relationships are indirect but important: Freddie Mac’s business depends on purchasing/guaranteeing mortgages originated by banks, mortgage companies, and other approved sellers/servicers, and on the continued demand from global fixed-income investors for agency MBS.

Freddie Mac Financial Statement Overview

Summary

Strong profitability with very high net margins and higher net income in 2025, plus improved operating cash flow. Offsetting this are historically extreme leverage through 2024 and a sharp reported deleveraging shift in 2025 that raises comparability/stability questions, alongside volatile cash flow conversion over time.

Income Statement

Profitability is a clear strength: net profit margins are consistently very high (roughly ~48%–69% from 2020–2025), with net income rising meaningfully in 2025 ($16.0B vs. $11.9B in 2024). Revenue growth has been uneven (down in 2022, modest in 2024, stronger in 2023 and 2025), indicating some cyclicality. Also note 2025 shows zero values for several operating profit fields (e.g., EBIT/EBITDA), which reduces transparency and confidence in operating trend comparisons even though bottom-line results are strong.

Balance Sheet

The balance sheet reflects the industry’s leverage-heavy model: assets are very large ($3.50T in 2025), but leverage is a key risk—debt-to-equity is extremely high in 2020–2024 (ranging ~55x to ~158x). A notable positive change appears in 2025, where reported total debt drops sharply to $37.7B and debt-to-equity improves to ~0.54x alongside higher equity ($70.4B), suggesting a major shift in capital structure. Return on equity remains healthy (~20%–25% recently), but the stark year-to-year leverage swing raises questions about comparability and balance sheet volatility.

Cash Flow

Cash generation is sizable and improved in 2025, with operating cash flow of $19.4B versus $6.6B in 2024, and strong reported free cash flow growth in 2025. However, cash flow has been volatile over time (sharp drop in 2020, declines in free cash flow in 2022–2024). Cash flow relative to reported earnings is mixed: free cash flow tracks net income in the data, but operating cash flow coverage is inconsistent and at times low (and one year is shown as 0), suggesting variability in cash conversion and/or data limitations.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	132.56B	120.27B	107.66B	81.34B	62.24B
Gross Profit	132.56B	120.27B	107.66B	81.34B	62.24B
EBITDA	121.78B	112.92B	100.02B	77.06B	59.15B
Net Income	10.73B	11.86B	10.54B	9.33B	12.11B
Balance Sheet
Total Assets	3.50T	3.39T	3.28T	3.21T	3.03T
Cash, Cash Equivalents and Short-Term Investments	90.74B	61.30B	5.04B	12.19B	12.47B
Total Debt	3.41T	3.30T	3.21T	3.16T	2.98T
Total Liabilities	3.43T	3.33T	3.23T	3.17T	3.00T
Stockholders Equity	70.38B	59.58B	47.72B	37.02B	28.03B
Cash Flow
Free Cash Flow	19.37B	6.63B	7.62B	11.93B	16.35B
Operating Cash Flow	19.37B	6.63B	7.62B	11.93B	16.35B
Investing Cash Flow	4.74B	9.62B	44.25B	11.40B	24.25B
Financing Cash Flow	-24.32B	-16.74B	-52.21B	-27.11B	-54.34B

Freddie Mac Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.88
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FMCC, the sentiment is Negative. The current price of 4.88 is below the 20-day moving average (MA) of 5.66, below the 50-day MA of 7.00, and below the 200-day MA of 8.94, indicating a bearish trend. The MACD of -0.72 indicates Positive momentum. The RSI at 35.72 is Neutral, neither overbought nor oversold. The STOCH value of 37.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FMCC.

Freddie Mac Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
FMCC	64 Neutral	$3.17B	3.06	16.19%	―	8.26%	81.01%
PFSI	54 Neutral	$4.41B	16.04	12.18%	0.90%	25.42%	190.85%
RKT	52 Neutral	$38.49B	-376.48	-0.68%	―	22.56%	―
UWMC	49 Neutral	$5.70B	33.82	15.25%	8.64%	-8.66%	―
LDI	46 Neutral	$641.38M	―	-24.39%	―	3.91%	27.78%

Freddie Mac Corporate Events

FHFA Approves Revised Compensation Package for Freddie Mac CFO

On February 5, 2026, the Federal Housing Finance Agency, acting as conservator, approved changes to the compensation package of Freddie Mac Executive Vice President and Chief Financial Officer James Whitlinger under the company’s Executive Management Compensation Program. Effective January 1, 2026, Whitlinger’s base salary remains $600,000, while his fixed deferred salary is set at $1,535,000 and his at-risk deferred salary at $915,000, underscoring FHFA’s continued oversight of executive pay at the government-controlled mortgage finance company and the ongoing use of deferred and at-risk components to align leadership incentives with longer-term performance and regulatory expectations.

The most recent analyst rating on (FMCC) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on Freddie Mac stock, see the FMCC Stock Forecast page.

FHFA Re-Elects Freddie Mac Board, Extending Governance Continuity

On February 3, 2026, under the authority it has exercised since being appointed Conservator of Freddie Mac in 2008, the Federal Housing Finance Agency re-elected all eligible, then-current members of Freddie Mac’s Board of Directors for another term via written consent, effectively continuing the existing board leadership. This action underscores the Conservator’s ongoing control over key corporate governance decisions at Freddie Mac and maintains continuity in the company’s oversight during its conservatorship status.

The most recent analyst rating on (FMCC) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on Freddie Mac stock, see the FMCC Stock Forecast page.