Freddie Mac (FMCC) AI Stock Analysis

• Market Cap: $7.72B
• Dividend Yield: N/A
• Average Volume (3M): 3.99M
• Price to Earnings (P/E): 3206.3
• Beta (1Y): 0.56
• Revenue Growth: 11.43%
• EPS Growth: 41.19%
• Country: US
• Employees: 8,076
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Mortgages
• EPS (TTM): -0.01
• Shares Outstanding: 650,059,600
• 10 Day Avg. Volume: 3,887,915
• 30 Day Avg. Volume: 3,989,069
• 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: 447.82
• Enterprise Value/Revenue: 34.48
• Enterprise Value/Gross Profit: 150.56
• Enterprise Value/Ebitda: 38.02
• 1Y Price Target: $4.50
• Price Target Upside: -62.12% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1

• Rating: 73 Outperform
• Price Target: $12.50 ▲(5.22% Upside)

Freddie Mac's strong financial performance and bullish technical indicators are the primary drivers of its score. However, the negative P/E ratio and lack of dividend yield weigh down the valuation score, presenting a risk for potential investors.

Freddie Mac Business Overview & Revenue Model

Company Description

Freddie Mac (FMCC) is a government-sponsored enterprise (GSE) established to support the U.S. housing market by providing liquidity, stability, and affordability in the mortgage market. It primarily operates in the residential mortgage sector, offering various products and services that include the purchase, securitization, and sale of mortgage loans. Freddie Mac's core mission is to enhance the availability of affordable housing by enabling lenders to provide more home financing options to a broad range of consumers.

How the Company Makes Money

Freddie Mac generates revenue primarily through the securitization of mortgage loans. The company buys mortgages from lenders, pools them into mortgage-backed securities (MBS), and then sells these securities to investors. Freddie Mac earns a guarantee fee from the lenders for assuming the credit risk associated with the loans, which constitutes a significant portion of its revenue. Additionally, Freddie Mac earns income from the interest on the mortgage loans held in its investment portfolio. The company also engages in risk-sharing transactions with private investors, which can provide further capital and diversify its risk exposure. Partnerships with banks, mortgage lenders, and institutional investors are crucial to Freddie Mac's operations, as they facilitate the acquisition of loans and the distribution of MBS to the market.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	100.30B	120.27B	21.23B	21.26B	21.95B	16.66B
Gross Profit	22.97B	23.44B	21.23B	19.42B	21.95B	16.66B
EBITDA	90.96B	112.92B	13.20B	77.06B	15.20B	9.23B
Net Income	11.51B	11.86B	10.54B	9.33B	12.11B	7.33B
Balance Sheet
Total Assets	3.44T	3.39T	3.28T	3.21T	3.03T	2.63T
Cash, Cash Equivalents and Short-Term Investments	6.86B	61.30B	5.04B	12.19B	12.47B	21.88B
Total Debt	3.35T	3.30T	3.21T	3.15T	2.98T	2.59T
Total Liabilities	3.37T	3.33T	3.23T	3.17T	3.00T	2.61T
Stockholders Equity	64.81B	59.58B	47.72B	37.02B	28.03B	16.41B
Cash Flow
Free Cash Flow	14.52B	6.63B	7.62B	11.93B	16.35B	907.00M
Operating Cash Flow	14.52B	6.63B	7.62B	11.93B	16.35B	907.00M
Investing Cash Flow	-11.79B	9.62B	44.25B	11.40B	24.25B	-83.36B
Financing Cash Flow	-4.00B	-16.74B	-52.21B	-27.11B	-54.34B	101.15B

Freddie Mac Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 11.88
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 11.88 is above the 20-day moving average (MA) of 9.46, above the 50-day MA of 8.14, and above the 200-day MA of 5.95, indicating a bullish trend. The MACD of 0.92 indicates Negative momentum. The RSI at 81.73 is Negative, neither overbought nor oversold. The STOCH value of 71.57 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
FMCC	73 Outperform	$7.72B	3,206.25	19.50%	―	11.43%	41.19%
Sector *	68 Neutral	$17.81B	11.87	10.24%	3.74%	9.75%	1.30%
PFSI	67 Neutral	$6.08B	16.29	10.05%	1.02%	20.77%	96.22%
COOP	65 Neutral	$13.64B	24.37	11.76%	―	2.27%	-17.46%
RKT	61 Neutral	$42.64B	68.51	>-0.01%	―	21.52%	-103.65%
GHLD	58 Neutral	$1.24B	51.00	2.12%	2.49%	34.62%	-7.94%
UWMC	56 Neutral	$9.44B	37.74	8.18%	6.34%	12.27%	-21.43%

Freddie Mac Corporate Events

Freddie Mac Updates Bylaws Amid Conservatorship

On August 12, 2025, Freddie Mac amended and restated its Bylaws to include an introductory paragraph summarizing the authority of the Federal Housing Finance Agency (FHFA) while the company is in conservatorship and to modify sections related to the role of Vice Chair of the Board. These changes reflect the company’s ongoing adjustments to its governance structure, potentially impacting its operational oversight and strategic direction in the financial services sector.

Freddie Mac Announces Executive Vice President’s Retirement

On June 23, 2025, Freddie Mac announced that Heidi L. Mason, its Executive Vice President and General Counsel, will retire effective September 1, 2025. This leadership change may impact the company’s legal strategies and operations as it navigates the evolving housing market landscape.

Freddie Mac Extends Interim CEO Tenure

On June 11, 2025, Freddie Mac announced that Michael T. Hutchins will continue to serve as the President and Interim Chief Executive Officer until a permanent CEO is appointed or until September 20, 2025. This extension ensures stability in leadership during a transitional period for the company, potentially impacting its strategic operations and stakeholder confidence.

Freddie Mac CEO Compensation Changes Approved

On June 13, 2025, the Federal Housing Finance Agency approved changes to the compensation of Michael T. Hutchins, President and Interim CEO of Freddie Mac. His base salary remains at $600,000, while his fixed and at-risk deferred salaries are set to increase in 2025 and 2026, which may impact the company’s executive management compensation structure.