Rocket Companies (RKT, Financial) is drawing attention in the options market as bearish sentiment mounts. A total of 9,728 put options were traded, doubling the expected volume. The most active contracts were the January 2026 puts at a strike price of 11.2, alongside May 9 weekly calls at 12.5, with combined trades nearing 8,300 contracts for these strikes.
The Put/Call Ratio stands at 1.58, indicating a preference for puts over calls. Additionally, the implied volatility (ATM IV) rose by nearly 4 points over the day, suggesting heightened anticipation ahead of the company's earnings report scheduled for May 8th.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 10 analysts, the average target price for Rocket Companies Inc (RKT, Financial) is $14.45 with a high estimate of $18.00 and a low estimate of $11.50. The average target implies an upside of 17.13% from the current price of $12.34. More detailed estimate data can be found on the Rocket Companies Inc (RKT) Forecast page.
Based on the consensus recommendation from 11 brokerage firms, Rocket Companies Inc's (RKT, Financial) average brokerage recommendation is currently 2.9, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Rocket Companies Inc (RKT, Financial) in one year is $86.74, suggesting a upside of 603.12% from the current price of $12.3365. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Rocket Companies Inc (RKT) Summary page.
RKT Key Business Developments
Release Date: February 27, 2025
- Q4 Adjusted Revenue: $1.2 billion, a 34% year-over-year increase.
- Full-Year 2024 Adjusted Revenue: $4.9 billion, a 30% year-over-year increase.
- Q4 Adjusted EPS: $0.04 per share.
- Full-Year 2024 Adjusted EPS: $0.23 per share.
- Adjusted EBITDA Margin: 18%, up from 2% the previous year.
- Net Rate Lock Volume: $24 billion in Q4, up 47% year over year; $101 billion for the full year, a 28% increase.
- Gain on Sale Margin: 295 basis points, up 32 basis points from 2023.
- Servicing Portfolio: $593 billion in unpaid principal balance, a 17% increase.
- New Servicing Clients: 308,000 added in 2024, bringing the total to 2.8 million.
- Available Cash: $2.9 billion, including $1.3 billion on the balance sheet and $1.6 billion in corporate cash.
- Total Liquidity: Approximately $8.2 billion, including available cash and undrawn lines of credit.
- Q1 2025 Revenue Outlook: Expected to be between $1.175 billion and $1.325 billion.
- Q1 2025 Expense Increase: Expected to rise by $100 million year over year due to higher production, increased marketing spend, and brand restage launch.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Rocket Companies Inc (RKT, Financial) reported a 34% year-over-year increase in Q4 adjusted revenue, reaching $1.2 billion, which was at the high end of their guidance range.
- The company achieved a 30% year-over-year increase in full-year adjusted revenue, totaling $4.9 billion.
- Rocket Companies Inc (RKT) expanded its servicing portfolio by 17%, reaching $593 billion in unpaid principal balance and adding 308,000 new servicing clients.
- The company introduced innovative products like ONE+ and Welcome Home RateBreak, which helped double the volume of affordability products in 2024 compared to 2023.
- Rocket Companies Inc (RKT) leveraged AI technology to enhance efficiency, saving 1 million team member hours and driving $40 million in efficiency gains.
Negative Points
- Despite strong financial performance, Rocket Companies Inc (RKT) faces challenges with housing affordability, which remains a significant barrier for many first-time buyers.
- The company anticipates a $100 million increase in total expenses for Q1 2025, driven by higher production costs, marketing expenses, and brand restage initiatives.
- Rocket Companies Inc (RKT) has a relatively low unaided brand awareness at 12%, indicating room for improvement in brand recognition.
- The bulk MSR market saw a decrease in trade volume in 2024, which could impact Rocket Companies Inc (RKT)'s ability to acquire MSR portfolios at desired levels.
- The company is navigating a volatile interest rate environment, which affects the attractiveness of refinancing options for homeowners.
