Value
6.0/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 8.1 |
| EV/EBITDA | 1.8 |
| Fwd P/E | 6.1 |
| PEG | 9.8 |
| Analyst target | 4.0 |
- ▸Forward P/E: 21.3x
- ▸PEG: 0.53
RKT · Why this verdict
Why Rocket Companies (RKT) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score6.7/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Rocket Companies has delivered a perfect 4-for-4 earnings beat streak with an average surprise of 38.7% and 167% year-over-year revenue growth, with analysts seeing 44% upside to consensus targets, but the company sits in a confirmed downtrend and carries significant concentration risk in Fannie Mae and Freddie Mac as counterparties.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
With Fannie Mae and Freddie Mac representing the primary loan purchasers, the company is highly exposed to government-sponsored enterprise policy changes, which represent a regulatory risk that could significantly impact the mortgage origination business model. Bear case | No material changes to GSE loan purchase programs or conforming loan limits occur that would reduce origination volumes by more than 20% over the next 12 months. | →Stable |
| CounterGSE relationships provide reliable execution and secondary market liquidity that actually reduce counterparty risk relative to private-label securitization alternatives, and the government backstop provides structural stability. | ||
The company has grown revenue at 167% year-over-year and carries a Rule of 40 score of 119 (elite tier), reflecting the rapid scale-up of its mortgage platform during a period of favorable origination volumes. Growth breakdown | Revenue growth remains above 30% in at least 3 of the next 4 quarters as the platform continues to gain market share. | →Stable |
| Counter167% revenue growth in mortgage origination likely includes a significant base-effect component and interest income normalization, and growth will slow materially as the comparison period normalizes. | ||
Rocket Companies has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 38.7%, including beats of 28%, 26.7%, 46.5%, and 53.7%, demonstrating persistent ability to outperform analyst forecasts in the mortgage origination business. Earnings | Beat streak extends to at least 6 consecutive quarters and average surprise remains above 15%. | →Stable |
| CounterMortgage origination companies are highly cyclical, and perfect beat streaks in a rising mortgage rate volume period may not be sustained when origination volumes decline or competitive pricing pressure intensifies. | ||
Analysts see 44% upside to their consensus target price of approximately $17.45 from the current price of $13.91, with 7 out of 10 analysts maintaining buy ratings, and the stock has a defined entry target of $12.02 that offers an improved risk-reward entry point. Sentiment breakdown | The stock rises above $17 within 18 months, reaching at least 80% of the analyst consensus target. | ↓Deteriorating |
| CounterThe stock sits in a confirmed downtrend with the 200-day moving average declining at -2.6% per month and elevated put/call ratio of 1.67 indicating meaningful near-term bearish positioning. | ||
With Fannie Mae and Freddie Mac representing the primary loan purchasers, the company is highly exposed to government-sponsored enterprise policy changes, which represent a regulatory risk that could significantly impact the mortgage origination business model.
→StableBear case
- Expectation
- No material changes to GSE loan purchase programs or conforming loan limits occur that would reduce origination volumes by more than 20% over the next 12 months.
CounterGSE relationships provide reliable execution and secondary market liquidity that actually reduce counterparty risk relative to private-label securitization alternatives, and the government backstop provides structural stability.
The company has grown revenue at 167% year-over-year and carries a Rule of 40 score of 119 (elite tier), reflecting the rapid scale-up of its mortgage platform during a period of favorable origination volumes.
→StableGrowth breakdown
- Expectation
- Revenue growth remains above 30% in at least 3 of the next 4 quarters as the platform continues to gain market share.
Counter167% revenue growth in mortgage origination likely includes a significant base-effect component and interest income normalization, and growth will slow materially as the comparison period normalizes.
Rocket Companies has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 38.7%, including beats of 28%, 26.7%, 46.5%, and 53.7%, demonstrating persistent ability to outperform analyst forecasts in the mortgage origination business.
→StableEarnings
- Expectation
- Beat streak extends to at least 6 consecutive quarters and average surprise remains above 15%.
CounterMortgage origination companies are highly cyclical, and perfect beat streaks in a rising mortgage rate volume period may not be sustained when origination volumes decline or competitive pricing pressure intensifies.
Analysts see 44% upside to their consensus target price of approximately $17.45 from the current price of $13.91, with 7 out of 10 analysts maintaining buy ratings, and the stock has a defined entry target of $12.02 that offers an improved risk-reward entry point.
↓DeterioratingSentiment breakdown
- Expectation
- The stock rises above $17 within 18 months, reaching at least 80% of the analyst consensus target.
CounterThe stock sits in a confirmed downtrend with the 200-day moving average declining at -2.6% per month and elevated put/call ratio of 1.67 indicating meaningful near-term bearish positioning.
Per-dimension breakdown
Quality
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.6 |
| ROA | 3.0 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 5.5 |
| Current ratio | 7.0 |
| FCF quality | 9.2 |
| Moat | 6.4 |
| Rule of 40 | 9.5 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 126% FCF/NI
- ▸Rule of 40: 108 (elite)
- ▸Strong Piotroski F-Score: 8/9
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
- ▸Strong growth: 94% YoY
Momentum
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 2.3 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 8.7 |
- ▸Overbought bear rally (RSI 81)
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -8.0%/30d — confirmed downtrend
Sentiment
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.2 |
| Price target | 6.0 |
| erm sentiment | 5.0 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Insider selling (low materiality) — $5,687,074 (0.015% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.0 |
| quality rank | 5.0 |
| growth rank | 7.5 |
Technical
0.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.5 |
| 52w position | 1.3 |
Risk (lower is worse)
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.3 |
| days to cover | 7.4 |
| volatility | 1.6 |
| put call | 10.0 |
| implied vol | 1.8 |
| max pain risk | 3.0 |
| beta | 2.4 |
| debt equity | 4.5 |
- ▸High IV: 69%
- ▸Above max pain $5
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Strong earnings: 3B/0M
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:7.4>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:118d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.5=NEGATIVE
Warning (1)
- DEATH_CROSS:momentum=7.4>=5.0 recovering
Reward-to-Risk
-0.47
Upside
-7.1%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 81
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -43% (>40% off 52w high)
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:7.4>=5.5. Top dim: Growth at 10.0; weakest: Technical at 0.6. No conviction either direction.
The strongest dimensions are Growth at 10.0, Catalyst at 7.5, and Momentum at 7.4; the weakest are Technical at 0.6, Risk (lower is worse) at 4.6, and Peer rank at 5.0. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.47 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak Large Surprises
Trip ifEarnings surprise falls below 0% in at least 2 of the next 4 quarters.
- P2Hypergrowth Revenue
Trip ifRevenue growth falls below 20% in at least 2 of the next 4 quarters.
- P3Gse Counterparty Concentration
Trip ifGSE conforming loan limits are reduced by more than 10% or a policy change materially restricts Rocket's loan sale volumes.
- P4Favorable Price Target Upside
Trip ifStock fails to rise above $17 within 18 months from today's price of $13.91.