Rocket Companies (NYSE:RKT) Announces Earnings Results, Beats Expectations By $0.01 EPS

Key Points

• Rocket Companies beat third-quarter EPS expectations, reporting adjusted EPS of $0.15 versus the $0.14 consensus. Adjusted revenue was approximately $2.57 billion, broadly in line with estimates, while profitability and market share improved.
• The company highlighted strong servicing, recapture, home-equity and refinancing performance, along with $11.4 billion in liquidity. It expects to complete $100 million in annualized Mr. Cooper synergies ahead of schedule and has identified an additional $100 million in savings.
• Fourth-quarter guidance signals a significant slowdown, with expected adjusted revenue of $2.1 billion to $2.3 billion as elevated mortgage rates and declining refinance activity weigh on demand. Shares rose about 3.1%, while analysts maintained a “Moderate Buy” consensus and an $18.88 price target.

Rocket Companies (NYSE:RKT - Get Free Report) issued its earnings results on Thursday. The company reported $0.15 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.14 by $0.01, FiscalAI reports. Rocket Companies had a return on equity of 5.13% and a net margin of 4.70%. The business had revenue of $2.57 billion during the quarter, compared to analyst estimates of $2.58 billion.

Here are the key takeaways from Rocket Companies' conference call:

• Rocket grew market share and expanded profitability despite a difficult mortgage market, reporting $2.6 billion in adjusted revenue, $748 million in adjusted EBITDA, a 29% margin, and $0.15 in adjusted EPS. Purchase share approached 6.5% and refinance share reached 15.5%.
• The company highlighted continued strength in servicing, home equity, cash-out refinancing, and recapture. Servicing generated roughly $1 billion in quarterly fee income, while recapture reached record levels and helped support higher gain-on-sale margins.
• Rocket expects to complete the remaining $100 million of annualized Mr. Cooper expense synergies in the fourth quarter, one year ahead of schedule, and has identified an additional $100 million in savings for the first half of 2027. Record liquidity of $11.4 billion and net corporate leverage below one turn provide capacity for further investment or acquisitions.
• Management expects the fourth quarter to be materially weaker as mortgage rates remain elevated and refinance applications fall more than 50% year over year. Adjusted revenue guidance is $2.1 billion to $2.3 billion, and executives warned that the broader mortgage market could reach its lowest level in decades.

Rocket Companies Trading Up 3.1%

Shares of Rocket Companies stock traded up $0.35 on Thursday, hitting $11.92. The stock had a trading volume of 33,497,471 shares, compared to its average volume of 30,244,766. The company has a quick ratio of 4.85, a current ratio of 4.85 and a debt-to-equity ratio of 1.16. Rocket Companies has a one year low of $10.18 and a one year high of $24.36. The stock has a market cap of $33.76 billion, a price-to-earnings ratio of 85.16, a PEG ratio of 3.51 and a beta of 2.23. The stock's 50-day simple moving average is $12.46 and its two-hundred day simple moving average is $14.87.

Insider Buying and Selling

In related news, CEO Jesse Bray sold 92,300 shares of the company's stock in a transaction on Friday, October 2nd. The shares were sold at an average price of $12.39, for a total transaction of $1,143,597.00. Following the completion of the sale, the chief executive officer directly owned 7,728,027 shares in the company, valued at $95,750,254.53. This represents a 1.18% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last three months, insiders have sold 450,000 shares of company stock worth $5,687,074. Corporate insiders own 57.68% of the company's stock.

Rocket Companies News Roundup

Here are the key news stories impacting Rocket Companies this week:

• Positive Sentiment: Q3 earnings slightly exceeded expectations. Rocket reported adjusted EPS of $0.15 versus the $0.14 analyst consensus. Adjusted revenue was $2.57 billion, broadly in line with the $2.58 billion forecast. Rocket Companies earnings report
• Positive Sentiment: Profitability was strong on a GAAP basis. Q3 GAAP net income reached $709 million, while adjusted net income was $419 million. The results provide a positive near-term earnings catalyst despite the company’s relatively high valuation. Rocket Companies announces third-quarter results
• Positive Sentiment: Analyst expectations remain bullish. A separate report said brokerages have a consensus price target of $18.88 for RKT, substantially above the recent trading range, although price targets are not guarantees. Rocket Companies consensus price target
• Neutral Sentiment: Several articles focused on Rocket’s fintech positioning, peer comparisons, or pre-earnings expectations and did not introduce a significant new company-specific catalyst. Rocket Companies peer review
• Negative Sentiment: Q4 guidance points to a sequential slowdown. Rocket expects fourth-quarter revenue of $2.10 billion to $2.30 billion, below Q3 adjusted revenue of $2.57 billion. The outlook may temper enthusiasm from the quarterly earnings beat. Rocket Companies fourth-quarter revenue outlook
• Negative Sentiment: Housing conditions remain challenging. U.S. home-sale prices recently declined for the first time in more than three years, while mortgage payments remain near record highs. Weak affordability could reduce mortgage activity and weigh on Rocket’s core business. U.S. home-sale prices report

Wall Street Analyst Weigh In

Several research analysts have commented on the stock. Royal Bank Of Canada reissued a "sector perform" rating and set a $16.00 price target (up from $15.00) on shares of Rocket Companies in a research note on Wednesday, August 12th. Keefe, Bruyette & Woods reduced their target price on shares of Rocket Companies from $20.00 to $19.00 and set an "outperform" rating on the stock in a report on Monday, August 10th. Barclays reduced their target price on shares of Rocket Companies from $17.00 to $15.00 and set an "overweight" rating on the stock in a report on Monday, October 5th. JPMorgan Chase & Co. decreased their target price on shares of Rocket Companies from $14.00 to $12.50 and set a "neutral" rating on the stock in a research report on Monday, October 12th. Finally, Benchmark lowered their price target on shares of Rocket Companies from $21.00 to $19.00 and set a "buy" rating for the company in a research note on Friday, August 7th. Eight investment analysts have rated the stock with a Buy rating and seven have given a Hold rating to the company. According to data from MarketBeat.com, the stock has an average rating of "Moderate Buy" and a consensus price target of $18.88.

About Rocket Companies

Rocket Companies, Inc is a Detroit-based financial technology company that operates a portfolio of consumer finance and real estate businesses. Its platform is designed to simplify the homeownership process through digital applications, automated workflows and online customer support.

The company's principal business is Rocket Mortgage, a residential mortgage lender and servicer offering home purchase, refinance and home equity products. Its broader portfolio includes Rocket Homes, a real estate services platform; Rocket Money, a personal finance app that helps consumers manage subscriptions, budgets and bills; Rocket Loans, which provides personal loans; and Rocket Pro, which supports mortgage brokers and other partners.

Rocket Companies traces its history to 1985, when Dan Gilbert founded Rock Financial.

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