Earnings shock and housing platform moves put Rocket Companies (RKT) in focus

Rocket Companies (RKT) is back on investors' radar after its 2025 earnings update, which paired strong revenue figures and new housing partnerships with a full year net loss and sharp share price pressure.

The share price reaction has been rough in the short term, with a 1 day share price return of a 5.83% decline and a 30 day share price return of a 23.05% decline as investors digest the 2025 net loss, acquisition costs and rising short interest. However, the 3 year total shareholder return of 99.62% alongside a 1 year total shareholder return of 11.44% shows that longer term holders have still seen gains despite recent volatility.

If this mix of housing data, earnings swings and partnerships has you looking beyond a single mortgage player, it could be a good moment to broaden your search with our 20 top founder-led companies.

With the shares down sharply in recent weeks, revenue at US$6.7b, a full year net loss of US$234m, and analysts’ average target still above the current US$15.66 price, is this a reset entry point or is the market already baking in future growth?

Most Popular Narrative: 60.8% Undervalued

According to a widely followed thesis from user nader, the fair value sits at $40 per share compared to the latest close at $15.66, which is a big gap that hinges on Rocket turning its housing ecosystem into a much larger profit engine.

Recent Mr. Cooper and Redfin acquisitions prop up the company to become a mortgage conglomerate. Users will be able to one-stop-shop for homes and mortgages through the Redfin or Rocket Mortgage apps. While housing supply is limited (but increasing) housing prices are only going up, and usage of Redfin as an agent will allow Rocket Companies to earn revenue on all fees related to home buying, from selling/buying agent fees to mortgage interest and maintenance fees. Rocket is in an extremely unique position to benefit from an increased OR decreased interest rate, to benefit from an increase in housing supply OR continued supply plateau, and to benefit from any housing uncertainty in the future. Anyone who's been watching knows that people are going to need to buy and sell homes no matter the conditions of the market, and the business being US-based shields Rocket from any potential tariffs or other political issues. I believe this is a unique entry point for a company that will grow consistently for years to come. I also believe we will see 14b gross revenue in 2 years time.

Curious how that $40 fair value is built? This narrative leans heavily on faster revenue expansion, healthier margins and a premium future earnings multiple. Want to see how those moving parts are stitched together and what has to go right for the numbers to line up?

Result: Fair Value of $40 (UNDERVALUED)

However, that hinges on successful integration of Mr. Cooper and Redfin, as well as the company moving from a US$68m net loss to sustainably positive earnings.

Another View: Current Price Looks Demanding On Sales

The $40 fair value story sits alongside a very different signal from the market’s go to yardstick for RKT, its P/S ratio. At 6.2x, RKT trades well above the US Diversified Financial industry at 2.2x, the peer average at 1.8x, and even its own 6x fair ratio estimate.

That gap suggests investors are already paying a premium for future execution. This raises a simple question: how comfortable are you paying growth stock terms for a business that is still loss making and reliant on forecasts playing out?

Next Steps

All of this paints a mixed picture, so if you feel torn, now is a good time to review the numbers yourself and weigh both sides. Then check out our breakdown of 2 key rewards and 2 important warning signs to see how those trade offs stack up in one place.

Looking for more investment ideas?

If RKT has you reassessing your watchlist, this is the moment to widen your lens and line up a few fresh contenders before the crowd catches on.

• Target stability first by scanning companies in our 73 resilient stocks with low risk scores that aim to keep risk scores on the lower side while still offering meaningful exposure to equities.
• Hunt for pricing gaps by checking companies flagged in our 47 high quality undervalued stocks that pair solid fundamentals with market prices that look out of sync with underlying numbers.
• Spot early movers by reviewing our screener containing 24 high quality undiscovered gems where strong business quality meets relatively low market attention, before interest potentially builds.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.