Rocket Companies (RKT) AI Stock Analysis

• Market Cap: $38.81B
• Dividend Yield: N/A
• Average Volume (3M): 22.04M
• Price to Earnings (P/E): 68.5
• Beta (1Y): 0.69
• Revenue Growth: 21.52%
• EPS Growth: -103.65%
• Country: US
• Employees: 14,200
• Sector: Financial
• Sector Strength: 69
• Industry: Financial - Mortgages
• EPS (TTM): 0.04
• Shares Outstanding: 255,640,090
• 10 Day Avg. Volume: 17,126,997
• 30 Day Avg. Volume: 22,036,199
• 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: 0.45
• 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

Acquisition Impact

Rocket's acquisition of Mr. Cooper remains on track to close, where it is expected to become the largest originator and servicer with $2.1 trillion in total servicing UPB.

Strategic Positioning

The deal combines the nation’s leading refinance/digital mortgage origination platform with the largest mortgage servicer, creating a powerful strategic fit.

Negative Factors

Operational Risks

Integrating two acquisitions simultaneously elevates operational risk, while the mortgage and housing market backdrop remains challenging.

Valuation Concerns

Risk-reward is less compelling after a 50% increase in shares, with the stock trading at a premium, suggesting most of the near-term upside is already reflected in the valuation.

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 primarily generates revenue through its mortgage origination and servicing operations. The company earns fees from originating new mortgages, which are subsequently sold to investors in the secondary market. Additionally, Rocket Companies generates income from the servicing of these loans, earning fees for managing the day-to-day operations of the mortgage accounts, including collecting payments and handling escrow accounts. The company also benefits from interest income on loans held for sale and gains on the sale of loans. Strategic partnerships and marketing agreements with real estate brokers and other financial institutions further bolster its revenue streams.

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: Positive
• 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 17.33, below the 50-day MA of 15.49, and above the 200-day MA of 13.28, indicating a bullish trend. The MACD of 0.95 indicates Positive momentum. The RSI at 63.31 is Neutral, neither overbought nor oversold. The STOCH value of 46.90 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
PFSI	67 Neutral	$5.53B	14.83	10.05%	1.09%	20.77%	96.22%
COOP	65 Neutral	$12.24B	21.22	11.76%	―	2.27%	-17.46%
RKT	61 Neutral	$38.81B	68.51	>-0.01%	―	21.52%	-103.65%
WD	61 Neutral	$2.92B	26.46	6.26%	3.06%	11.18%	24.94%
Sector *	58 Neutral	HK$112.28B	6.37	-4.87%	3.89%	9.01%	-45.73%
GHLD	58 Neutral	$1.23B	51.03	2.12%	2.49%	34.62%	-7.94%
UWMC	56 Neutral	$8.96B	37.74	8.18%	6.87%	12.27%	-21.43%

Rocket Companies Corporate Events

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.

Rocket Companies Announces $4 Billion Senior Notes Offering

On June 3 and June 5, 2025, Rocket Companies announced and priced a private offering of $4 billion in senior notes due in 2030 and 2033. These notes will be guaranteed by Rocket Mortgage and its subsidiaries, and potentially by Redfin and Mr. Cooper upon their acquisitions. The proceeds will be used for redeeming existing notes, paying related fees, and repaying secured debt. The offering is not contingent on the acquisitions, but there are provisions for mandatory redemption if the Mr. Cooper acquisition is not completed by September 30, 2026.

Rocket Companies Announces Board Size Reduction

On May 20, 2025, Rocket Companies announced that Nancy Tellem decided not to stand for re-election as a Class II director, with her term ending on June 11, 2025. Following her departure, the Board decided to reduce its size to eight directors, effective upon the expiration of her term.