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Rocket Companies Inc (RKT)
:RKT
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Rocket Companies (RKT) AI Stock Analysis

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RKT

Rocket Companies

(NYSE:RKT)

Rating:61Neutral
Price Target:
$17.50
▲(20.86%Upside)
Rocket Companies faces significant financial challenges with declining revenues and negative cash flow, impacting the stock's overall score. However, strong technical momentum, positive earnings call outcomes, and strategic corporate events contribute positively, offering potential future growth despite current financial weaknesses.
Positive Factors
Earnings
Gain on sale margins exceeded expectations, contributing to a better than estimated second quarter performance.
Revenue Synergies
Early indicators suggest that Redfin is becoming a strong referral channel for Rocket Companies, enhancing revenue synergies.
Negative Factors
Market Conditions
Unfavorable market conditions are influencing a neutral rating on Rocket Companies.
Operating Expenses
Third quarter operating expenses are projected to increase significantly, partly due to the Redfin acquisition.

Rocket Companies (RKT) vs. SPDR S&P 500 ETF (SPY)

Rocket Companies Business Overview & Revenue Model

Company DescriptionRocket 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 MoneyRocket 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 Key Performance Indicators (KPIs)

Any
Any
Revenue by Segment
Revenue by Segment
Analyzes revenue from different business segments, highlighting which areas drive growth and profitability, and revealing strategic focus and potential vulnerabilities.
Chart InsightsRocket Companies is experiencing a rebound in 'Sale of Loans' revenue, driven by strategic acquisitions and AI-driven efficiencies, despite previous declines. The 'Interest' segment shows steady growth, reflecting effective cost management. However, 'Change in Value of MSRs' remains volatile, posing a risk. The earnings call highlights strong Q1 2025 results and optimism about future growth, despite market volatility impacting consumer sentiment. Strategic acquisitions like Redfin and Mr. Cooper are expected to bolster their integrated platform, potentially mitigating risks and enhancing revenue stability.
Data provided by:Main Street Data

Rocket Companies Earnings Call Summary

Earnings Call Date:Jul 31, 2025
(Q2-2025)
|
% Change Since: -1.96%|
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Neutral
Rocket Companies reported strong financial performance and successful integration of Redfin, with AI-driven efficiencies and growth in home equity loans. However, market challenges and increased expenses due to acquisitions present ongoing concerns.
Q2-2025 Updates
Positive Updates
Strong Quarterly Performance
Adjusted revenue reached $1.34 billion, exceeding the high end of guidance and achieving 9% year-over-year growth. Net rate lock volume increased by 13% year-over-year, and adjusted EBITDA was $172 million, representing a 13% margin.
Home Equity Loan Growth
Home equity loan volume nearly doubled year-over-year, setting a new record for units and volume. These loans now make up nearly half of all home equity loan clients.
AI-Driven Operational Improvements
AI-driven enhancements have increased refinance client follow-ups by nearly 20% and reduced manual underwriting processes, saving an estimated 20,000 hours annually.
Successful Redfin Integration
Post-acquisition, Redfin has enhanced Rocket's platform with a unified digital presence, increased traffic, and introduced Rocket preferred pricing. The integration has seen early success with high lead conversion rates.
Mr. Cooper Acquisition On Track
The Mr. Cooper transaction is on track to close in Q4, with significant planning and integration efforts underway.
Cost Efficiency Measures
Operational efficiency measures, including the wind down of Rocket Mortgage Canada and the credit card program, are expected to save approximately $80 million annually.
Negative Updates
Challenging Housing Market
The housing market faced challenges with a slow-forming spring season and June existing home sales 2.7% lower than May, at an annualized pace of 3.9 million, more than 20% below pre-pandemic levels.
Market Volatility
April experienced significant volatility, with tariffs, fluctuating rates, and declining consumer sentiment affecting market conditions.
Increased Expenses
Projected total expenses are expected to increase by approximately $335 million in Q3, reflecting Redfin-related costs and nonrecurring items such as severance and transaction costs related to acquisitions.
Company Guidance
During the Rocket Companies' second quarter 2025 earnings call, the company reported impressive financial performance with adjusted revenue reaching $1.34 billion, exceeding the high end of their guidance. Net rate lock volume rose by 13% year-over-year, while they served over 100,000 origination clients, marking a 19% increase. The company achieved an adjusted EBITDA of $172 million, representing a 13% margin, and an adjusted diluted EPS of $0.04. Notably, home equity loan volume nearly doubled year-over-year. The call also highlighted the successful integration of Redfin, with Rocket seeing over 65 Redfin clients closing on homes since the acquisition. Looking ahead, Rocket projects third-quarter adjusted revenue between $1.6 billion and $1.75 billion, inclusive of Redfin, and expects to close the Mr. Cooper acquisition in Q4 2025.

Rocket Companies Financial Statement Overview

Summary
Rocket Companies is facing financial challenges with declining revenues from $13.18 billion in 2021 to $5.07 billion TTM, and negative cash flow, indicating profitability pressures. Despite high gross profit margins, the company's high debt-to-equity ratio and negative free cash flow highlight financial risks.
Income Statement
45
Neutral
Rocket Companies has faced significant revenue challenges with a decline from $13.18 billion in 2021 to $5.07 billion TTM, indicating a sharp contraction. Gross profit margins remain high at over 90%, showcasing pricing power. However, net income margins have dwindled, with a TTM net income of only $2.77 million, indicating profitability pressures.
Balance Sheet
50
Neutral
The company has a high debt-to-equity ratio, reflecting considerable leverage and potential financial risk. However, equity has been relatively stable. Asset quality is a concern given the high levels of liabilities relative to equity. Stockholders' equity has shown volatility, which can pose risks under adverse conditions.
Cash Flow
40
Negative
Negative free cash flow in the TTM period highlights cash management challenges. The company had a negative operating cash flow of $413 million TTM, suggesting operational inefficiencies. Large capital expenditures relative to operating cash flow have further strained liquidity.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue5.07B5.40B4.01B6.00B13.18B15.90B
Gross Profit4.59B4.93B3.65B5.68B12.68B15.46B
EBITDA259.39M780.97M-292.63M835.93M6.26B9.61B
Net Income2.77M29.37M-15.51M46.42M308.21M197.95M
Balance Sheet
Total Assets25.25B24.51B19.23B20.08B32.77B37.53B
Cash, Cash Equivalents and Short-Term Investments4.17B4.06B1.14B722.29M2.13B1.97B
Total Debt14.80B13.98B9.56B8.71B19.26B21.95B
Total Liabilities16.67B15.47B10.93B11.61B23.02B29.65B
Stockholders Equity583.97M702.50M624.90M576.70M665.66M490.50M
Cash Flow
Free Cash Flow-1.26B-3.43B49.99M10.72B7.44B-1.78B
Operating Cash Flow-413.52M-2.63B110.33M10.82B7.74B-1.68B
Investing Cash Flow-455.66M-495.47M861.15M578.74M-664.85M517.20M
Financing Cash Flow1.41B3.28B-623.56M-12.82B-6.92B1.76B

Rocket Companies Technical Analysis

Technical Analysis Sentiment
Positive
Last Price14.48
Price Trends
50DMA
13.92
Positive
100DMA
13.43
Positive
200DMA
13.13
Positive
Market Momentum
MACD
0.46
Negative
RSI
65.83
Neutral
STOCH
38.96
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 14.53, above the 50-day MA of 13.92, and above the 200-day MA of 13.13, indicating a bullish trend. The MACD of 0.46 indicates Negative momentum. The RSI at 65.83 is Neutral, neither overbought nor oversold. The STOCH value of 38.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RKT.

Rocket Companies Risk Analysis

Rocket Companies disclosed 63 risk factors in its most recent earnings report. Rocket Companies reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Rocket Companies Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
69
Neutral
$9.97B17.8011.76%2.27%-17.46%
65
Neutral
£5.15B8.786.90%5.08%20.28%-10.03%
61
Neutral
$34.81B68.51>-0.01%21.52%-103.65%
61
Neutral
$2.55B25.725.62%3.52%6.68%6.08%
57
Neutral
$1.24B28.603.71%2.52%42.92%64.72%
56
Neutral
$4.96B13.2910.05%1.29%20.77%96.22%
52
Neutral
$6.67B37.74-5.74%9.59%9.19%-171.38%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
RKT
Rocket Companies
16.54
-0.27
-1.61%
WD
Walker & Dunlop
74.46
-23.71
-24.15%
PFSI
PennyMac Financial
95.85
1.89
2.01%
COOP
Mr Cooper Group
174.26
91.15
109.67%
UWMC
UWM Holding
4.17
-3.97
-48.77%
GHLD
Guild Holdings
19.86
6.31
46.57%

Rocket Companies Corporate Events

M&A TransactionsBusiness Operations and Strategy
Rocket Companies Completes Acquisition of Redfin
Positive
Jul 1, 2025

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.

The most recent analyst rating on (RKT) stock is a Hold with a $16.00 price target. To see the full list of analyst forecasts on Rocket Companies stock, see the RKT Stock Forecast page.

Business Operations and Strategy
Rocket Companies Streamlines Structure with New Amendments
Neutral
Jun 30, 2025

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.

The most recent analyst rating on (RKT) stock is a Hold with a $16.00 price target. To see the full list of analyst forecasts on Rocket Companies stock, see the RKT Stock Forecast page.

Private Placements and FinancingShareholder Meetings
Rocket Companies Expands Funding with New Agreements
Positive
Jun 17, 2025

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.

The most recent analyst rating on (RKT) stock is a Hold with a $16.00 price target. To see the full list of analyst forecasts on Rocket Companies stock, see the RKT Stock Forecast page.

Private Placements and FinancingM&A Transactions
Rocket Companies Announces $4 Billion Senior Notes Offering
Neutral
Jun 5, 2025

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.

The most recent analyst rating on (RKT) stock is a Hold with a $14.00 price target. To see the full list of analyst forecasts on Rocket Companies stock, see the RKT Stock Forecast page.

Executive/Board Changes
Rocket Companies Announces Board Size Reduction
Neutral
May 23, 2025

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.

The most recent analyst rating on (RKT) stock is a Hold with a $18.00 price target. To see the full list of analyst forecasts on Rocket Companies stock, see the RKT Stock Forecast page.

Business Operations and Strategy
Rocket Companies Ends Credit Agreement with JPMorgan
Neutral
May 2, 2025

Rocket Companies terminated its Revolving Credit Agreement dated July 4, 2024, with JPMorgan Chase Bank, N.A., without incurring any early termination penalties or prepayment premiums. This move may impact the company’s financial strategy and liquidity management, potentially influencing its market positioning and stakeholder relations.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 02, 2025