Rocket Companies, Inc.
Rocket Companies, Inc. Fundamental Analysis
Rocket Companies, Inc. (RKT) shows weak financial fundamentals with a PE ratio of 162.95, profit margin of 2.82%, and ROE of 1.53%. The company generates $8.5B in annual revenue with strong year-over-year growth of 27.37%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 29.3/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze RKT's fundamental strength across five key dimensions:
Efficiency Score
WeakRKT struggles to generate sufficient returns from assets.
Valuation Score
ModerateRKT shows balanced valuation metrics.
Growth Score
ModerateRKT shows steady but slowing expansion.
Financial Health Score
WeakRKT carries high financial risk with limited liquidity.
Profitability Score
WeakRKT struggles to sustain strong margins.
Key Financial Metrics
Is RKT Expensive or Cheap?
P/E Ratio
RKT trades at 162.95 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, RKT's PEG of 0.04 indicates potential undervaluation.
Price to Book
The market values Rocket Companies, Inc. at 1.68 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 5.75 times EBITDA. This is generally considered low.
How Well Does RKT Make Money?
Net Profit Margin
For every $100 in sales, Rocket Companies, Inc. keeps $2.82 as profit after all expenses.
Operating Margin
Core operations generate 15.59 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $1.53 in profit for every $100 of shareholder equity.
ROA
Rocket Companies, Inc. generates $0.40 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Rocket Companies, Inc. generates limited operating cash flow of $-1.27B, signaling weaker underlying cash strength.
Free Cash Flow
Rocket Companies, Inc. generates weak or negative free cash flow of $-1.39B, restricting financial flexibility.
FCF Per Share
Each share generates $-0.49 in free cash annually.
FCF Yield
RKT converts -3.58% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
162.95
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.04
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.68
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.59
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.36
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.00
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.02
vs 25 benchmark
ROA
Return on assets percentage
0.004
vs 25 benchmark
ROCE
Return on capital employed
0.02
vs 25 benchmark
How RKT Stacks Against Its Sector Peers
| Metric | RKT Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 162.95 | 18.96 | Worse (Expensive) |
| ROE | 1.53% | 797.00% | Weak |
| Net Margin | 2.82% | -7699.00% (disorted) | Weak |
| Debt/Equity | 1.36 | 2.38 | Strong (Low Leverage) |
| Current Ratio | 0.00 | 560.28 | Weak Liquidity |
| ROA | 0.40% | -23967.00% (disorted) | Weak |
RKT outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Rocket Companies, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-96.34%
Industry Style: Value, Dividend, Cyclical
DecliningEPS CAGR
-102.91%
Industry Style: Value, Dividend, Cyclical
DecliningFCF CAGR
80.18%
Industry Style: Value, Dividend, Cyclical
High Growth