Rocket Companies Turns Around, But Mortgage Risk Remains

Summary

Rocket Companies TodayRKTRocket Companies$14.16 +0.37 (+2.68%) As of 11:16 AM Eastern52-Week Range$12.25▼$24.36P/E Ratio283.20Price Target$20.93 Rocket Companies NYSE: RKT has pulled off a dramatic financial turnaround thanks to the company’s strategic reinvention and the strength of homebuyers. Whether mortgage rates and the housing market continue to cooperate may determine if potential investors will also be buying. That’s a far cry from where the Detroit-based mortgage giant was a year ago when it was battling losses, squeezed between high interest rates that were slowing the housing market and the cost of two major acquisitions.Get Rocket Companies alerts:Sign Up Now, those acquisitions are paying off, and the housing market, though it remains highly volatile, has repositioned the company to take advantage of any upswing. Rocket’s Financial Turnaround Gains MomentumFor the first quarter of this year, Rocket reported total revenue of $2.94 billion, nearly triple the $1.1 billion it posted in the same quarter last year. Net income swung from a loss of $212 million to a profit of $297 million. Mortgage closings more than doubled, reaching $44.7 billion in loans. The numbers look just as strong on an adjusted basis, a measure that strips out volatile swings in the valuations of mortgage servicing rights and gives a clearer picture of underlying business performance. Adjusted revenue climbed to $2.82 billion from $1.36 billion a year earlier, also above expectations. Adjusted net income soared above analysts’ expectations to $422 million, or 15 cents a share, from just $80 million. And for the full year 2025, Rocket generated $6.86 billion in adjusted revenue and $628 million in adjusted net income, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $1.28 billion. Liquidity is also solid. Rocket ended the first quarter with $9.4 billion in total available liquidity, including $2.7 billion in cash. Those funds could come in hand...