Rocket Companies, Inc. (RKT) | Investment Case

1. Company Snapshot

1.a. 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.

Show Full description

1.b. Last Insights on RKT

Rocket Companies' recent performance was driven by strong Q3 earnings, beating expectations on both top and bottom lines with quarterly earnings of $0.07 per share. The company's transformative merger with Mr. Cooper and acquisition of Redfin have created an end-to-end homebuying ecosystem, boosting revenue stability and client recapture. A $6B cash position and stable servicing portfolio support its growth strategy. Additionally, CFO Brian Brown's participation in the UBS Global Technology and AI Conference may enhance investor confidence.

1.c. Company Highlights

Last Price	19.03
Change Percentage	-1.86%
Open	19.37
Previous Close	19.39
Market Cap ( Millions)	53741
Volume	20600097
Year High	22.55
Year Low	10.06
M A 50	17.6
M A 200	15.59

FCF Yield	2.28%
Dividend Yield	4.20%
ROE	-2.32%
Debt / Equity	251.43%
Net Debt / EBIDTA	2404.61%
Price To Book	0.37
Price Earnings Ratio	-31.94
Price To FCF	43.84
Price To sales	11.66
EV / EBITDA	129.71

2. Rocket Companies' Q3 2025 Earnings: A Strong Performance

Rocket Companies reported a robust third-quarter 2025 performance, with adjusted revenue reaching $1.783 billion, surpassing guidance. The company's net rate lock volume stood at $36 billion, a 26% increase from the second quarter, while closed loan volume was $32 billion, up 11%. Adjusted EBITDA was $349 million, with a 20% margin, and adjusted diluted EPS was $0.07, beating estimates of $0.04494. The company's financial performance was bolstered by its gain on sale margin, which remained stable.

Publication Date: Nov -09

                                    📋 Highlights
                                    Adjusted Revenue Growth:
                                                Rocket Companies reported adjusted revenue of $1.783 billion, surpassing guidance, with Q3 net rate lock volume up 26% to $36 billion and closed loan volume at $32 billion (+11%).
AI & Integration Synergies:
                                                AI agents improved conversion rates and cut costs; Redfin integration boosted mortgage attach rates to 40% (from 27%), with $60 million revenue synergies expected by 2026.
Mr. Cooper Acquisition Traction:
                                                Post-acquisition, 40,000 leads from Mr. Cooper’s servicing book entered Rocket’s pipeline in 9 days, while 400 loan officers were onboarded, creating a 10M-client recapture engine.
Strong Capital Position:
                                                Pro forma cash reserves of $4 billion and total liquidity of $11 billion, with Q4 adjusted revenue guidance of $2.1–$2.3 billion and $500 million synergy target from Mr. Cooper ($400M savings, $100M revenue).
Unified Platform & Recurring Cash Flow:
                                                Combined servicing portfolio generates $5 billion in annual recurring cash flow, supported by 62 million monthly active visitors and a 10 million-homeowner recapture base.

                                

Operational Highlights

The company has made significant strides in its AI initiatives, launching three AI agents that have improved client follow-ups, conversion rates, and reduced production costs. The integration with Redfin is exceeding expectations, with mortgage attach rates climbing from 27% to 40%. The acquisition of Mr. Cooper was completed on October 1, and the company is already seeing traction, with 40,000 leads from Mr. Cooper's servicing book flowing into the Rocket pipeline.

Business Model Transformation

Rocket's business model is transforming, with a vertically integrated platform powered by AI, and a new type of business model that thrives in any interest rate environment. The company expects to take care of every client, every time, earning lifetime value and the privilege of being their lender for life. The combined servicing portfolio nears 10 million clients, creating a massive recapture engine.

Valuation and Outlook

The company's capital position is strong, with pro forma available cash of approximately $4 billion and total liquidity of $11 billion. With a P/S Ratio of 9.9 and EV/EBITDA of 113.77, the market is pricing in significant growth expectations. Analysts estimate next year's revenue growth at 70.1%. The company's guidance for the fourth quarter is between $2.1 billion and $2.3 billion in adjusted revenue, with total expenses expected to be approximately $2.3 billion.

Synergy Targets and Growth

The Mr. Cooper acquisition is expected to drive growth, with $500 million in synergies, including $400 million in expense savings and $100 million in revenue growth. The company is confident in its ability to drive growth and create long-term shareholder value through its AI-powered vertically integrated homeownership platform. The integration of Redfin and Mr. Cooper is on track, with expected revenue synergies and expense savings.

3. NewsRoom

Redfin Reports Investor Activity Is Muted, With Home Purchases Up 1% and Market Share Holding Steady

Dec -05

Source: businesswire.com

Starter-Home Sales Climb 5%, But Prices Are Staying in Check as Inventory Hits 9-Year High

Dec -04

Source: businesswire.com

Redfin Reports Inventory Growth Loses Steam As Would-Be Sellers React to Lackluster Homebuying Demand

Dec -04

Source: businesswire.com

Rocket Companies, Inc. (RKT) Presents at UBS Global Technology and AI Conference 2025 Transcript

Dec -03

Source: seekingalpha.com

Redfin Reports 15% of Home Purchases Fell Through in October, Up Slightly From a Year Earlier

Dec -03

Source: businesswire.com

Rocket Mortgage Parent Primed For This Kind Of Option Trade

Dec -02

Source: investors.com

BitMine, Rocket Companies, And Symbotic Are Among the Top 10 Large-Cap Gainers Last Week (Nov. 24-Nov. 28): Are the Others in Your Portfolio?

Nov -30

Source: feeds.benzinga.com

Rocket Companies CFO Brian Brown to Present at UBS Global Technology and AI Conference

Nov -26

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.50%)

6. Segments

Direct to Consumer

Expected Growth: 12.0%

The 12.0% growth in Direct to Consumer segment of Rocket Companies, Inc. is driven by increased demand for digital mortgage platforms, expanded product offerings, and efficient customer acquisition strategies. Strong performance is also attributed to the company's investments in technology and data analytics, enabling personalized customer experiences and streamlined operations.

Partner Network

Expected Growth: 18.0%

The Partner Network growth of 18.0% is driven by Rocket Companies, Inc.'s strategic expansion of its real estate and mortgage services ecosystem, increased adoption of its technology platforms, and growing demand for digital mortgage solutions, resulting in higher revenue and transaction volumes from its network of partners.

ALL Other

Expected Growth: 8.0%

The 8.0% growth in ALL Other from Rocket Companies, Inc. is driven by increased market share in mortgage and non-mortgage financial products, expanded product offerings, and strong performance in technology and data analytics segments, contributing to revenue diversification and scalability.

7. Detailed Products

Quicken Loans Mortgage

Quicken Loans is a mortgage lender that offers a range of home loan products, including conventional loans, FHA loans, VA loans, and jumbo loans.

Rocket Mortgage

Rocket Mortgage is a digital mortgage platform that allows users to apply for a mortgage online and get pre-approved in minutes.

Rocket Homes

Rocket Homes is a real estate platform that allows users to search for homes, get pre-approved for a mortgage, and connect with real estate agents.

Rocket Auto

Rocket Auto is an auto financing platform that allows users to shop for and finance a new or used vehicle.

Rocket Business

Rocket Business offers financial services and products to small businesses, including business loans, lines of credit, and cash flow management solutions.

Truebill

Truebill is a personal finance management platform that helps users manage their subscriptions, bills, and expenses.

8. Rocket Companies, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Rocket Companies, Inc. operates in the mortgage and real estate industries, where there are various substitutes available, such as traditional banks, credit unions, and other non-bank lenders. However, the company's diversified business model and strong brand presence mitigate the threat of substitutes.

Bargaining Power Of Customers

Rocket Companies, Inc. has a large customer base and a strong brand reputation, which reduces the bargaining power of individual customers. Additionally, the company's mortgage and real estate services are essential to customers, reducing their ability to negotiate.

Bargaining Power Of Suppliers

Rocket Companies, Inc. relies on various suppliers, such as investors, insurers, and technology providers. While the company has strong relationships with its suppliers, there are other players in the market that can provide similar services, which maintains a moderate level of bargaining power.

Threat Of New Entrants

The mortgage and real estate industries are highly regulated and require significant investment in technology, marketing, and talent. This creates a barrier to entry for new companies, reducing the threat of new entrants.

Intensity Of Rivalry

The mortgage and real estate industries are highly competitive, with many established players and new entrants vying for market share. Rocket Companies, Inc. faces intense competition from companies like Quicken Loans, Bank of America, and Wells Fargo, which drives innovation and pricing pressure.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	37.11%
Debt Cost	9.24%
Equity Weight	62.89%
Equity Cost	15.23%
WACC	13.01%
Leverage	59.00%

11. Quality Control: Rocket Companies, Inc. passed 3 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Nasdaq

A-Score: 5.7/10

Value: 2.2

Growth: 5.8

Quality: 6.7

Yield: 3.0

Momentum: 7.0

Volatility: 9.7

1-Year Total Return ->

Arthur J Gallagher

A-Score: 5.5/10

Value: 2.1

Growth: 6.7

Quality: 7.1

Yield: 2.0

Momentum: 6.0

Volatility: 9.3

1-Year Total Return ->

ICE

A-Score: 5.4/10

Value: 2.7

Growth: 6.1

Quality: 6.7

Yield: 2.0

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

MSCI

A-Score: 5.3/10

Value: 2.8

Growth: 7.9

Quality: 7.6

Yield: 2.0

Momentum: 4.0

Volatility: 7.7

1-Year Total Return ->

Walker Dunlop

A-Score: 5.0/10

Value: 5.4

Growth: 3.9

Quality: 5.7

Yield: 6.0

Momentum: 2.5

Volatility: 6.3

1-Year Total Return ->

Rocket

A-Score: 4.3/10

Value: 4.0

Growth: 1.6

Quality: 3.4

Yield: 8.0

Momentum: 6.0

Volatility: 3.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

42.94%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

13.01%

Rocket Companies, Inc. - US77311W1018

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on RKT

1.c. Company Highlights

Expensive

More Volatile

Lower Growth

Earnings Beats

Revenues Beats

Lower Quality

Revenues Miss

Stable Momentum

Strong Momentum

Higher Yield

Weak Momentum

2. Rocket Companies' Q3 2025 Earnings: A Strong Performance

Operational Highlights

Business Model Transformation

Valuation and Outlook

Synergy Targets and Growth

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.50%)

6. Segments

Direct to Consumer

Expected Growth: 12.0%

Partner Network

Expected Growth: 18.0%

ALL Other

Expected Growth: 8.0%

7. Detailed Products

Quicken Loans Mortgage

Rocket Mortgage

Rocket Homes

Rocket Auto

Rocket Business

Truebill

8. Rocket Companies, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Rocket Companies, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

19.03$

Current Price

19.03$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA