Freddie Mac (FMCC) AI Stock Analysis

• Market Cap: $4.77B
• Dividend Yield: N/A
• Average Volume (3M): 3.10M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.67
• 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: 713.44
• Enterprise Value/Revenue: 43.68
• Enterprise Value/Gross Profit: 68.10
• Enterprise Value/Ebitda: 27.95
• 1Y Price Target: $14.12
• Price Target Upside: 105.83% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 56 Neutral
• Price Target: $7.50 ▲(9.33% Upside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

The score is supported primarily by strong reported profitability and improved 2025 cash generation, but is held back by major balance-sheet comparability/leverage concerns and clearly bearish technical conditions. Valuation is also a drag due to a highly negative P/E and no dividend yield data.

Positive Factors

High Profitability

Freddie Mac reports persistently very high net margins and higher net income in 2025, which signals a durable core earnings engine from guarantee fees and interest spread. Sustained profitability supports capital accumulation, internal funding for guarantees and resilience across housing cycles.

Improved Cash Generation

Operating cash flow strengthened materially in 2025, improving free cash flow and liquidity available to support securitization activity and capital needs. Better cash generation increases flexibility for risk management, buffer building and funding mortgage purchases over the medium term.

Deleveraging & stronger equity base in 2025

A marked reduction in reported debt and a much higher equity base in 2025 represent a structural shift in capital structure. Lower leverage materially reduces solvency and liquidity stress risk and enhances Freddie Mac's capacity to absorb shocks and support mortgage market operations longer term.

Negative Factors

Historically Extreme Leverage

Prior years show extraordinarily high leverage that magnified sensitivity to interest rates, credit losses and liquidity swings. Such legacy leverage patterns complicate trend comparability, leave policy and balance-sheet repositioning exposed to execution risk, and heighten systemic vulnerability.

Volatile Cash Conversion

Operating and free cash flow have been inconsistent across the past several years, reducing predictability of internal funding for mortgage purchases and guarantees. This variability constrains reliable capital planning and increases reliance on external funding or policy support in stressed periods.

Ongoing FHFA Conservatorship & governance constraints

Freddie Mac remains under FHFA conservatorship with the agency controlling board composition and executive pay. This persistent regulatory control limits strategic autonomy, may prioritize policy objectives over private investor alignment, and creates uncertainty about long-term governance and capital policy.

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

Strong profitability with consistently very high net margins and higher net income in 2025, plus improved operating cash flow. The main offset is balance-sheet risk and comparability: historically extreme leverage through 2024 followed by an abrupt 2025 deleveraging signal, and some missing/zero operating profit fields that reduce trend transparency.

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	131.69B	23.44B	22.10B	19.42B	22.99B
Gross Profit	21.98B	23.44B	22.10B	19.42B	22.99B
EBITDA	121.78B	14.78B	13.20B	11.60B	15.20B
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: 6.86
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 6.86 is below the 20-day moving average (MA) of 7.29, below the 50-day MA of 8.77, and below the 200-day MA of 9.02, indicating a bearish trend. The MACD of -0.45 indicates Negative momentum. The RSI at 35.81 is Neutral, neither overbought nor oversold. The STOCH value of 64.45 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%
PFSI	58 Neutral	$4.99B	10.33	12.55%	0.90%	25.42%	190.85%
FMCC	56 Neutral	$4.77B	-302.49	18.03%	―	8.26%	81.01%
UWMC	49 Neutral	$7.86B	-533.33	11.37%	8.64%	-8.66%	―
RKT	49 Neutral	$51.95B	231.11	-2.15%	―	22.56%	―
LDI	47 Neutral	$679.80M	-5.56	-25.72%	―	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.

Freddie Mac Appoints Kenny M. Smith as CEO

On December 16, 2025, Freddie Mac announced the appointment of Kenny M. Smith as its new Chief Executive Officer, effective December 17, 2025. Mr. Smith, a retired senior principal from Deloitte Consulting LLP, brings extensive experience in the financial services industry, having served in various leadership roles. His appointment is accompanied by a Memorandum Agreement detailing his compensation and employment terms. This leadership change is expected to influence Freddie Mac’s strategic direction and operations, with Michael Hutchins continuing as President.

The most recent analyst rating on (FMCC) stock is a Buy with a $13.35 price target. To see the full list of analyst forecasts on Freddie Mac stock, see the FMCC Stock Forecast page.