Why Rocket Companies (RKT) Is Up 6.5% After Redfin and Mr. Cooper Integration Momentum

• In the past quarter, Rocket Companies, Inc. reported third-quarter revenue of US$1.61 billion and a net loss of US$123.85 million, reflecting major year-over-year increases in both revenue and losses.
• The company emphasized significant momentum from its integration of newly acquired Redfin and the completed Mr. Cooper transaction, which have rapidly expanded its capabilities across the homeownership platform.
• We'll explore how the successful integration of Mr. Cooper could influence Rocket Companies' investment narrative and market positioning going forward.

We've found 15 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Rocket Companies Investment Narrative Recap

To own Rocket Companies shares right now, you need to believe that the company’s newly expanded homeownership platform, including Redfin and Mr. Cooper, can drive higher, sustainable revenues and offset ongoing losses. The recent Q3 update showed revenue surged, but losses widened as well, so the biggest near-term catalyst remains realizing cost and revenue synergies from these acquisitions, while the biggest risk is persistent unprofitability in a higher-rate environment. This news does little to materially change the risk side for now.

The most relevant recent announcement is the completed acquisition of Mr. Cooper Group. This move positions Rocket as the largest mortgage servicer in the US and could meaningfully impact recurring revenues if integration delivers as hoped. Yet, the financial strain from servicing a much larger loan book and integrating new platforms remains a closely watched concern.

On the other hand, investors should be aware that even with acquisition momentum, Rocket’s continued reliance on mortgage lending and the risk of elevated borrowing costs could...

Read the full narrative on Rocket Companies (it's free!)

Rocket Companies' outlook projects $8.7 billion in revenue and $3.2 billion in earnings by 2028. This implies a 19.3% annual revenue growth rate and an earnings increase of about $3.2 billion from current earnings of -$308 thousand.

Uncover how Rocket Companies' forecasts yield a $18.67 fair value, a 5% upside to its current price.

Exploring Other Perspectives

Eight Simply Wall St Community members estimate Rocket’s fair value between US$18.67 and US$40 per share. While revenue growth forecasts are ambitious, ongoing net losses remind you to weigh both upside and risk before forming your view.

Explore 8 other fair value estimates on Rocket Companies - why the stock might be worth just $18.67!

Build Your Own Rocket Companies Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Rocket Companies research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free Rocket Companies research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Rocket Companies' overall financial health at a glance.

Contemplating Other Strategies?

Markets shift fast. These stocks won't stay hidden for long. Get the list while it matters:

• Uncover the next big thing with financially sound penny stocks that balance risk and reward.
• The end of cancer? These 29 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's.
• This technology could replace computers: discover 27 stocks that are working to make quantum computing a reality.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com