TenQ

The Rocket Companies story

Rocket Companies combines mortgage lending, servicing and real estate, with the central question of whether Redfin and Mr. Cooper can turn home searches and servicing relationships into repeat mortgage business.

Rocket Companies stock reportTenQ Score 8/36 · every chart and check from its filings
  • $10.78share price, last close
  • $30.5Bmarket value
  • 8/36TenQ Score checks passed

The story in brief

  • Market share expands. In the quarter to June 2026, Rocket reached record purchase market share of 6.2% and refinance market share of 14.3%.
  • Servicing integration advances. Rocket completed the migration of all servicing clients onto a single platform in the quarter to June 2026, connecting a portfolio of 9.1 million loans.
  • Profit measures diverge. In the quarter to June 2026, Rocket reported GAAP net income of $229 million and adjusted net income of $441 million, with adjustments including acquisition expenses, stock compensation and acquired intangible amortization.

What drives the business

  • Rocket acquired Redfin in July 2025 and completed its $14.2 billion acquisition of Mr. Cooper in October 2025, linking home search with mortgage origination and servicing.
  • Its servicing portfolio had $2.0 trillion in unpaid principal balance as of June 30, 2026, generating recurring contractual fees and opportunities to finance clients' next purchase or refinance.
  • Beginning in the quarter to June 2026, Rocket reported a single Mortgage segment covering origination, servicing, title, closing and appraisal, while Redfin, Rocket Money and Rocket Loans were included in All Other.
  • Rocket originated $49.1 billion in closed mortgage loans in the quarter to June 2026 at a total gain on sale margin of 2.48%, while its Compass partnership had generated more than $2 billion in net rate lock volume since inception.
  • The servicing relationship also supports other lending products, with more than half of Rocket Loans' personal loans going to servicing clients as volume nearly doubled year over year in the first half of 2026.

What the price assumes

The growth implied by Rocket's price is not measured because TenQ does not run a reverse DCF for finance industry classifications, where free cash flow may not measure earnings.

At $11.31, Rocket trades at 31.8x earnings, while its earnings yield of 3.1% falls short of the 5.3% Treasury benchmark in TenQ's check.

Revenue grew 98.6% over the last twelve months, but its annual growth pace over the last three years was 4.7%, below the 23.4% sector benchmark in TenQ's sustained growth check.

What could change the story

  • Despite profitability, free cash flow was -$772 million over the last twelve months, and operating cash conversion of -6.4% failed TenQ's sector comparison, although mortgage financing complicates the interpretation of cash flow.
  • Return on equity of 2.7% was below TenQ's sector benchmark of 11.9%, leaving a gap between Rocket's expanded scale and the returns earned on shareholder capital.
  • Compass pricing incentives supported partner recruitment but contributed to Rocket Pro's gain on sale margin of 0.69% in the quarter to June 2026, illustrating the cost of expanding distribution.
  • Mortgage demand depends on interest rates, property values and housing activity, while competition extends to loan pricing, client retention and access to capital.
  • Rocket's $11.2 billion liquidity position as of June 30, 2026 included $3.1 billion of cash, with the remainder consisting of undrawn credit facilities rather than cash on hand.

What to watch next

  • Rocket expects adjusted revenue between $2.5 billion to $2.7 billion in the quarter to September 2026, compared with $2.76 billion in the quarter to June 2026.
  • Future disclosures on repeat lending to servicing clients and Redfin mortgage conversion will test the benefits of integration, following doubled Redfin mortgage leads year over year in June 2026.
  • Origination volume and gain on sale margins will show whether record market share and Compass partner recruitment translate into sustained lending profitability.

Sources

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