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Rocket Companies, Inc.

NYSE · Financial Services
Rocket Companies, Inc.
RKT · Mortgage Finance
$13.97
▼ -0.66 (-4.54%)
Data cached · refreshes every 10 min
Mr. Market is currently offering Rocket Companies, Inc. at $13.97.
The business passes only 3 of 6 of Graham's defensive criteria — well below his required standard.
Overall Grade
F
Defensive
F
Enterprising
Profitability F
Net Income Margin -1.1%
Fin. Health F
Years to Pay Off Debt -228.8 yrs
Valuation A
Margin of Safety 41.6%
Price-to-Book 0.60x
Cash Flow C
Free Cash Flow -$4.6B
Owner Earnings $863M
3/6
Graham Score
Speculative
Defensive — Graham's strict criteria (P/B, P/E, dividends, stability)  ·  Enterprising — Profitability & cash flow focused, accepts higher valuations for quality
Metric Explanations
What each dimension measures and where the thresholds come from.
Net Income Margin
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Years to Pay Off Debt
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Margin of Safety
How far below the Graham Number the stock trades. Graham required a 33% discount as a buffer against analytical error. However, the Graham Number itself assumes 1960s-era P/E and P/B norms — for modern asset-light businesses it often understates true intrinsic value, making 0% MoS appear misleadingly bad.
Price-to-Book
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies. Negative P/B indicates book equity has been reduced by buybacks — common in highly profitable capital-return businesses.
Free Cash Flow
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
Owner Earnings
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
Market Data
Market Cap $39.5B
Enterprise Value $72.1B
P/E (TTM) 12.83
Dividend Yield N/A
Exchange NYSE
Key Margins
Gross Profit N/A
Operating Margin N/A
Net Margin -1.1%
Company Info
Sector Financial Services
Industry Mortgage Finance
Employees 23500
Country United States
Visit website
📖
Full Graham Analysis

Mr. Market is currently offering Rocket Companies, Inc. at $13.97.

The business passes only 3 of 6 of Graham's defensive criteria — well below his required standard.

At $13.97, the stock trades below its Graham Number of $23.93 — suggesting a margin of safety exists.

The margin of safety of 41.6% exceeds Graham's recommended 33% threshold — a rare opportunity.

Conclusion: By Graham's standards, this stock is speculative at its current price. The intelligent investor would look elsewhere or wait.

About Rocket Companies, Inc.

Rocket Companies, Inc., a fintech company, engages in the mortgage, real estate, and personal finance businesses in the United States and Canada. It operates in two segments, Direct to Consumer and Partner Network. The company offers Rocket Mortgage, a mortgage lender service; Redfin, a digital real estate brokerage and home search platform; Rocket Close, a digital experience for appraisal management, settlement, and title services; Rocket Money, a finance app that offers a suite of financial wellness services including subscription cancellation, budget management and credit score improvement; and Rocket Loans, a platform for personal loan. It also originates, closes, sells, and services agency-conforming loans; and provides Rocket Pro that works with mortgage brokers, community banks, and credit unions, to maintain own brand and client relationships. Rocket Companies, Inc. was founded in 1985 and is headquartered in Detroit, Michigan. Rocket Companies, Inc. operates as a subsidiary of Rock Holdings Inc.

Showing Key Metrics
Income Highlights
Metric 2025 2024 2023 2022 2021
Gross Profit % N/A • N/A N/A N/A N/A
Operating Margin % N/A • N/A N/A N/A N/A
Net Income % -1.1% ▼ 0.6% -0.4% 0.8% N/A
Diluted EPS N/A • 0.21 -0.15 0.28 2.32
Balance Sheet Highlights
Metric 2025 2024 2023 2022 2021
Total Assets $60.7B $24.5B $19.2B $20.1B N/A
Total Debt $15.6B ↑ $4.9B $5.2B $5.9B N/A
Working Capital N/A • N/A N/A N/A N/A
Years to Pay Debt -228.84 168.69 -327.98 128.09 N/A
Cash Flow Highlights
Metric 2025 2024 2023 2022 2021
Free Cash Flow -$4.6B ▼ -$3.4B -$50M $10.7B N/A
Owner Earnings $863M $948M $255M $248M N/A
CapEx % of Net Income N/A 2,779.3% N/A 232.1% N/A
These metrics estimate what Rocket Companies, Inc. is worth based on its fundamentals — independent of what the market currently prices it at. Graham's Fair Value and NCAV are conservative floors rooted in 1930s–60s principles. EPV assumes zero growth. None are price targets — they are reference points for judging whether the current price offers a margin of safety.
Graham's Fair Value
$23.93
Margin of Safety
41.6%
Market Cap ÷ Company Value
1.54
P/B Ratio
0.60
Warren's Owner Earnings
$863M
Latest fiscal year
Graham's 7 Criteria
Defensive Investor Checklist
3/6 — Speculative Investor
✅ Adequate Size
$6.3B
vs > $1.5B revenue
❌ Earnings Stability
1 loss years (4 yrs data)
vs No negative EPS years
❌ Dividend Record
No dividend
vs Uninterrupted dividends
❌ Earnings Growth
-90.9% EPS growth
vs > 33% EPS growth
✅ Moderate P/E Ratio
12.8x
vs P/E ≤ 15.0x
✅ Moderate Price-to-Book
0.60x P/B (P/E×P/B: 7.7)
vs P/B ≤ 1.5x | P/E × P/B ≤ 22.5
Graham's 7 Criteria — Explained
What each criterion measures and why it may or may not apply to modern businesses.
✅ Adequate Size — $6.3B vs > $1.5B revenue
Graham required companies large enough to withstand economic downturns. This threshold ($1.5B) is inflation-adjusted from Graham's original $100M — virtually all S&P 500 companies pass this today.
"The minimum size of an enterprise should be not less than $100 million of annual sales."
❌ Earnings Stability — 1 loss years (4 yrs data) vs No negative EPS years
Graham required uninterrupted positive earnings. Any loss year is a red flag for defensive investors. Growth companies and cyclicals may show occasional losses during investment cycles or downturns without being fundamentally unsound.
"The company should have shown no deficit in the past ten years."
❌ Dividend Record — No dividend vs Uninterrupted dividends
Graham valued dividends as evidence of financial discipline and shareholder alignment. Many excellent modern businesses (Alphabet, Amazon, Berkshire Hathaway) pay no dividend, preferring to reinvest cash at high rates of return. Failing this criterion does not indicate a poor business — it may indicate a high-growth one.
"Some current dividend payments — for at least the past 20 years."
❌ Earnings Growth — -90.9% EPS growth vs > 33% EPS growth
EPS grew from $2.32 to $0.21 over 2 years. Graham's 33% threshold was set over a 10-year period. Measured over fewer years (as here), the bar is proportionally lower. Share buybacks can also inflate EPS growth without reflecting underlying business improvement.
"A minimum increase of at least one-third in per-share earnings over ten years."
✅ Moderate P/E Ratio — 12.8x vs P/E ≤ 15.0x
Graham's 15x P/E threshold was calibrated to 1960s market averages when interest rates were higher. Today's lower rate environment structurally supports higher multiples — the S&P 500 long-run average P/E is now closer to 20–25x. A stock trading at 20x is not automatically speculative in the modern context.
"The price-earnings ratio should be no more than 15 times average earnings."
✅ Moderate Price-to-Book — 0.60x P/B (P/E×P/B: 7.7) vs P/B ≤ 1.5x | P/E × P/B ≤ 22.5
Graham's 1.5x P/B threshold made sense when most company value was tangible. Today, intangible assets — brand, software, patents, network effects — rarely appear on the balance sheet. A high P/B in tech, pharma, or consumer brands often reflects intangible value, not overvaluation. P/FCF or EV/EBITDA are more reliable for asset-light businesses.
"The price should not be more than 1½ times book value. P/E × P/B ≤ 22.5."
Net Current Asset Value
N/A
"Buy at two-thirds of net current assets." — Graham
Earnings Power Value
N/A
Per share, no-growth floor. Compare to current price.
Cash Flow Analysis
Metric 2025 2024 2023 2022 2021
Capital Expenditure % of Net Income N/A 2,779.3% N/A 232.1% N/A
Repurchase of Capital Stock N/A $0M $0M -$178M -$232M
Free Cash Flow -$4.6B ▼ -$3.4B ▼ -$50M ▼ $10.7B • N/A •
Warren's Owner Earnings $863M $948M $255M $248M N/A
Peers & Industry
No auto-detected peers for Mortgage Finance. You can manually compare RKT against any stock using the Compare tool.
"The management of a business is its most important single factor — more important than market position, patents, or financial structure."
— Benjamin Graham
Capital Allocation & Alignment
Insider Ownership
1.28%
Low — management has little skin in the game
Return on Equity (ROE)
-0.3%
Weak — poor returns on equity
Return on Assets (ROA)
-0.1%
Poor — assets are not generating adequate returns
Debt Trend YoY
+218.1% YoY
Debt is growing — management is leveraging up
Leadership Team
Daniel Gilbert
Founder & Chairman of the Board
Age 63
Varun Krishna
CEO & Director
Age 42
Pay: $5,889,829
Brian Nicholas Brown
President, CFO & Treasurer
Age 45
Pay: $2,133,338
Heather Lovier
Chief Operating Officer
Age 51
Pay: $1,309,174
Sharon Ng
Vice President of Investor Relations
Top Institutional Holders
Institution % Owned Shares
Vanguard Group Inc 8.99% 87,256,540
Blackrock Inc. 6.44% 62,576,013
ValueAct Holdings, L.P. 4.06% 39,380,652
Morgan Stanley 2.78% 27,009,279
Price (T.Rowe) Associates Inc 2.70% 26,189,869
Slate Path Capital, LP 2.65% 25,689,300
FMR, LLC 2.20% 21,400,592
Cooperman, Leon G. 2.16% 21,016,600
⚠️ Very high beta — extreme price volatility
Risk Analysis
Beta (Market Risk)
2.25
High volatility — moves more than the market
Short Interest
6.8% of float
Moderate short interest
Debt-to-Equity
1.48x
Moderate leverage
Current Ratio
6.95x
Strong liquidity — Graham approved
52-Week Price Range
Low: $11.08 Current: $13.97 High: $24.36
Currently at 22% of 52-week range

Rocket Companies, Inc. (RKT) fundamental analysis — Overall grade F based on profitability, financial health, valuation and cash flow. Graham's Fair Value: $23.93. Margin of safety: 41.6%. Gross profit margin: N/A. Operating margin: N/A. Net margin: -1.1%. Market cap: $39.5B. Sector: Financial Services. Industry: Mortgage Finance. Analysis powered by 360investing — free fundamental stock analysis based on Benjamin Graham and Warren Buffett principles.

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