Rocket Companies (RKT) AI Stock Analysis

• Market Cap: $44.43B
• Dividend Yield: N/A
• Average Volume (3M): 22.79M
• Price to Earnings (P/E): 68.5
• Beta (1Y): 0.65
• Revenue Growth: 21.52%
• EPS Growth: -103.65%
• Country: US
• Employees: 14,200
• Sector: Financial
• Sector Strength: 73
• Industry: Financial - Mortgages
• EPS (TTM): 0.04
• Shares Outstanding: 255,640,090
• 10 Day Avg. Volume: 25,595,694
• 30 Day Avg. Volume: 22,792,852
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.40
• Enterprise Value/Revenue: 3.54
• Enterprise Value/Gross Profit: 3.84
• Enterprise Value/Ebitda: 73.65
• 1Y Price Target: $13.83
• Price Target Upside: -4.49% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

• Rating: 61 Neutral
• Price Target: $19.50 ▲(34.67% Upside)

Rocket Companies' stock score is primarily influenced by its financial challenges, including declining revenue and high leverage. However, strong technical indicators and positive sentiment from the latest earnings call, driven by strategic acquisitions and AI innovations, provide a counterbalance. The valuation remains a concern due to negative profitability metrics.

Positive Factors

AI Innovations

AI innovations enhance operational efficiency, reducing costs and improving customer engagement, which can lead to sustained competitive advantages.

Redfin Acquisition

The acquisition of Redfin expands Rocket's market reach and integration capabilities, potentially driving long-term revenue growth and market positioning.

Funding Capacity

Enhanced funding capacity ensures liquidity and supports strategic initiatives, enabling Rocket to capitalize on growth opportunities and manage financial obligations.

Negative Factors

High Leverage

High leverage can strain financial flexibility, increasing risk during economic downturns and potentially impacting long-term financial stability.

Negative Cash Flow Growth

Negative cash flow growth indicates operational inefficiencies, which could hinder Rocket's ability to invest in growth and manage debt obligations effectively.

Profitability Challenges

Ongoing profitability challenges suggest operational inefficiencies and market pressures, potentially affecting Rocket's ability to generate sustainable earnings.

Rocket Companies Business Overview & Revenue Model

Company Description

Rocket Companies, Inc. engages in the tech-driven real estate, mortgage, and e-Commerce businesses in the United States and Canada. It operates through two segments, Direct to Consumer and Partner Network. The company's solutions include Rocket Mortgage, a mortgage lender; Amrock that provides title insurance, property valuation, and settlement services; Rocket Homes, a home search platform and real estate agent referral network, which offers technology-enabled services to support the home buying and selling experience; Rocket Auto, an automotive retail marketplace that provides centralized and virtual car sales support to online car purchasing platforms; and Rocket Loans, an online-based personal loans business. It also offer Core Digital Media, a digital social and display advertiser in the mortgage, insurance, and education sectors; Rocket Solar, which connect homeowners with digital financing solutions through a team of trained solar advisors; Truebill, a personal finance app that helps clients manage every aspect of their financial lives; Lendesk, a technology services company that provides a point of sale system for mortgage professionals and a loan origination system for private lenders; and Edison Financial, a digital mortgage broker. In addition, the company originates, closes, sells, and services agency-conforming loans. Rocket Companies, Inc. was founded in 1985 and is headquartered in Detroit, Michigan. Rocket Companies, Inc. operates as a subsidiary of Rock Holdings, Inc.

How the Company Makes Money

Rocket Companies generates revenue primarily through its mortgage origination and servicing activities. The company earns fees from processing mortgage applications and receives origination points from borrowers when loans are closed. Additionally, Rocket Companies profits from servicing fees on the mortgages it originates, as well as interest income from loans it holds in its portfolio. A significant revenue stream also comes from its technology platform, which offers tools and services that streamline the mortgage process for both consumers and lenders. The company has established partnerships with various financial institutions and real estate firms, further enhancing its market reach and contributing to its earnings. Overall, the combination of origination fees, servicing fees, and technology solutions underpins Rocket Companies' revenue model.

Rocket Companies Financial Statement Overview

Summary

Rocket Companies is facing financial challenges with declining revenue and profitability, high leverage, and cash flow issues. The company needs to address operational inefficiencies and improve its financial stability to enhance shareholder value.

Income Statement

Rocket Companies has experienced a decline in revenue growth, with a negative growth rate of -1.49% in the TTM period. The gross profit margin remains strong at 46.66%, but the net profit margin is negative, indicating profitability challenges. The EBIT and EBITDA margins have also turned negative, reflecting operational inefficiencies.

Balance Sheet

The company has a high debt-to-equity ratio of 25.35, indicating significant leverage. Return on equity is negative, suggesting that the company is not generating returns for shareholders. The equity ratio is relatively low, which could pose risks in financial stability.

Cash Flow

Free cash flow growth is significantly negative at -104.96%, indicating cash flow challenges. The operating cash flow to net income ratio is low, suggesting inefficiencies in converting income to cash. However, the free cash flow to net income ratio is positive, showing some ability to generate cash relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.99B	5.40B	4.01B	6.00B	13.18B	15.90B
Gross Profit	4.60B	4.93B	3.65B	5.68B	12.68B	15.46B
EBITDA	239.72M	780.97M	-292.63M	835.93M	6.26B	9.61B
Net Income	-308.00K	29.37M	-15.51M	46.42M	308.21M	197.95M
Balance Sheet
Total Assets	30.36B	24.51B	19.23B	20.08B	32.77B	37.53B
Cash, Cash Equivalents and Short-Term Investments	5.11B	1.27B	1.11B	722.29M	2.13B	7.67B
Total Debt	20.34B	13.98B	9.56B	10.35B	21.18B	27.65B
Total Liabilities	22.91B	15.47B	10.93B	11.61B	23.02B	29.65B
Stockholders Equity	7.45B	702.50M	624.90M	576.70M	665.66M	490.50M
Cash Flow
Free Cash Flow	62.29M	-3.43B	49.99M	10.72B	7.44B	-1.78B
Operating Cash Flow	505.81M	-2.63B	110.33M	10.82B	7.74B	-1.68B
Investing Cash Flow	-269.45M	-495.47M	861.15M	578.74M	-664.85M	517.20M
Financing Cash Flow	-282.42M	3.28B	-623.56M	-12.82B	-6.92B	1.76B

Rocket Companies Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 14.48
• 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 RKT, the sentiment is Positive. The current price of 14.48 is below the 20-day moving average (MA) of 18.96, below the 50-day MA of 16.90, and above the 200-day MA of 13.65, indicating a bullish trend. The MACD of 1.08 indicates Negative momentum. The RSI at 68.30 is Neutral, neither overbought nor oversold. The STOCH value of 76.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RKT.

Rocket Companies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	70 Neutral	$14.13B	9.10	6.89%	4.78%	25.57%	48.68%
COOP	65 Neutral	$14.06B	25.19	11.76%	―	2.27%	-17.46%
PFSI	64 Neutral	$6.43B	17.25	10.05%	0.96%	20.77%	96.22%
RKT	61 Neutral	$44.43B	68.51	>-0.01%	―	21.52%	-103.65%
LDI	61 Neutral	$1.40B	―	-23.67%	―	6.60%	44.77%
GHLD	58 Neutral	$1.24B	51.15	2.12%	2.49%	34.62%	-7.94%
UWMC	56 Neutral	$11.05B	37.74	8.18%	5.84%	12.27%	-21.43%

Rocket Companies Corporate Events

Rocket Companies Extends Tender Offers for Acquisition

On September 2, 2025, Rocket Companies announced the extension of expiration dates for its tender offers and consent solicitations related to Nationstar Mortgage Holdings Inc.’s senior notes, in connection with its pending acquisition of Mr. Cooper Group Inc. The extension is intended to align with the anticipated closing of the acquisition, reflecting Rocket’s strategic move to consolidate its position in the mortgage industry. The extension applies to both tender offers and exchange offers, with the new expiration set for September 30, 2025, subject to further extensions. This move is crucial for Rocket’s acquisition strategy, as it aims to finalize the acquisition concurrently with the settlement of these offers, impacting stakeholders by potentially altering the financial and operational landscape of the combined entities.

Rocket Companies President Bill Emerson Announces Retirement

On August 20, 2025, Bill Emerson announced his retirement from his role as President of Rocket Companies, effective December 31, 2025. Despite stepping down as President, Mr. Emerson will remain involved with the company as a director, ensuring continuity in leadership and strategic direction.

Rocket Companies Completes Acquisition of Redfin

On July 1, 2025, Rocket Companies completed its acquisition of Redfin Corporation, a Delaware-based company. This acquisition is significant for Rocket Companies as it provides unaudited financial statements and pro forma financial information, indicating the integration of Redfin into Rocket’s operations. The acquisition is expected to impact Rocket’s financial positioning and market strategy, although the specific implications for stakeholders are not detailed in the release.

Rocket Companies Announces Tender Offers for Acquisition

On August 4, 2025, Rocket Companies announced cash tender offers and consent solicitations for Nationstar Mortgage Holdings’ senior notes, as part of its acquisition of Mr. Cooper Group. The offers aim to amend indenture provisions, eliminating certain covenants and default events, and are contingent on acquiring Mr. Cooper. This move is expected to streamline Rocket’s financial operations and enhance its market positioning.

Rocket Companies Completes Acquisition of Redfin

On July 1, 2025, Rocket Companies completed its acquisition of Redfin, making Redfin a wholly owned subsidiary. This merger combines Redfin’s popular real estate brokerage website with Rocket’s leading mortgage services, aiming to enhance the homebuying experience. The companies introduced Rocket Preferred Pricing, offering financial incentives for clients using both services. Additionally, Rocket Companies simplified its organizational structure by collapsing its ‘Up-C’ structure, which is expected to improve equity liquidity and enhance its corporate profile.

Rocket Companies Streamlines Structure with New Amendments

Rocket Companies has made significant amendments to its Tax Receivable Agreement and other related agreements as part of an internal reorganization. These changes, effective as of June 30, 2025, include the termination of the Exchange Agreement and the introduction of a new class of Class L Common Stock, while eliminating Class B and C Common Stocks. The amendments aim to streamline the company’s structure and clarify tax-related obligations, potentially impacting stakeholders by altering the financial and operational dynamics of the company.

Rocket Companies Expands Funding with New Agreements

On June 12, 2025, Rocket Companies, Inc. subsidiaries entered into a Second Amended and Restated Master Repurchase Agreement with JPMorgan Chase Bank, extending the termination date to June 11, 2027, and increasing the facility from $2.0 billion to $3.0 billion. Additionally, on June 13, 2025, Rocket Mortgage renewed its Master Repurchase Agreement with Banco Santander, extending the expiration to June 11, 2027, and increasing the facility amount to $1.0 billion. These agreements enhance Rocket Companies’ funding capacity, which totaled $28.2 billion as of June 16, 2025. Furthermore, at the annual meeting on June 11, 2025, stockholders elected two Class II directors and ratified Ernst & Young LLP as the independent accounting firm for 2025.