Rocket Companies (RKT) Falls -1.2%

Rocket Companies has moved -1.2% so far today on a volume of 2,478,192, compared to its average of 3,326,877. In contrast, the S&P 500 index moved -1.1%. Over the last 52 weeks, the stock moved -48.2%, with a high of $15.71 and a low of $5.97. During this time, the stock lagged the S&P 500 index by -32.5%. Rocket Companies, Inc., a fintech holding company, provides mortgage lending, title and settlement services, and other financial technology services in the United States and Canada. The small-cap Financial Services company has 26,000 full time employees and is based in Detroit, MI. Rocket Companies has not offered any dividends in the last year.

Snapshot of the Company's Shaky Fundamentals:

2018-12-31 2019-12-31 2020-12-31 2021-12-31
Revenue $4,308,889,000 $5,204,018,000 $15,895,590,000 $13,175,612,000
Operating Margins 19.67% 22.6% 62.68% 50.68%
Operating Margins Growth n/a 14.9% 177.35% -19.14%
Earnings Per Share $n/a n/a $1.76 $2.32
EPS Growth n/a n/a n/a 31.82%
Free Cash Flow $1,366,708,000 $-7,027,567,000 $-1,783,716,000 $7,625,637,000
FCF Growth n/a -614.2% 74.62% 527.51%
LT Debt to Equity 2.92 4.39 55.33 26.48

Basic Valuation Metrics Show Rocket Companies Is Fairly Valued:

Compared to the Financial Services sector's average of 13.34, Rocket Companies has a trailing twelve month price to earnings (P/E) ratio of 4.4 and, based on its Eps guidance of 0.02, an expected P/E ratio of 395.0. The firm's price to earnings growth (PEG) is 2.93, which indicates that it is overvalued in terms of its expected rate of earnings growth. . Rocket Companies's price to book (P/B) ratio is 1.7 compared to its sector average of 1.95.

As of the date of publication, the company is trading -42.2% below their Graham number, implying there is a margin of safety for the stock. We calculate the Graham number as follows:

√(22.5 * TTM earnings per share * book value per share) = √(22.5 * 1.8 * 4.601) = $13.66

There Is Negative Market Sentiment About Rocket Companies:

14 analysts are following Rocket Companies and have set target prices ranging from $4.5 to $9 per share. On average, they have given the company a rating of hold. At today's prices, RKT is trading 10.96% away from its average analyst target price of $7.12 per share, implying an analyst belief that shares are overpriced for the stock. The company has an unusually large proportion of its shares sold short since 29.5% of the company's shares are tied to short positions. Institutions own 65.2% of Rocket Companies's shares, while the insider ownership rate stands at 4.9%. The biggest shareholder is Vanguard Group, Inc. (The) with a 8.27% stake in the company worth approximately $79,591,355.00.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.