Rocket Companies Intrinsic Stock Value – Rocket Companies’ Platform Proves Resilient in Face of Interest Rate/Mortgage Convexity Uncertainty
June 10, 2023
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Rocket Companies ($NYSE:RKT), the parent company of Quicken Loans, has demonstrated its resilience in the face of interest rate/mortgage convexity uncertainty. The strength of their platform is largely dependent upon interest rate/mortgage convexity, as it’s the mechanism through which they can accurately price loans. This allows them to offer more competitive rates to customers, which has been key to their success. Rocket Companies is a Detroit-based financial services company operating primarily in the United States, offering mortgage and refinancing services, personal loans, and auto financing. They are renowned for its efficient online lending system which allows them to process loans faster than traditional lenders.
Despite the uncertain economic conditions created by the coronavirus pandemic, Rocket Companies has been able to maintain its strong position in the market due to its ability to accurately price loans with interest rate/mortgage convexity. This has enabled them to continue offering competitive rates to their customers, allowing them to remain profitable and remain one of the most successful companies in the sector. Their ability to accurately price loans has allowed them to remain competitive and profitable, making them one of the most successful companies in the sector.
Market Price
ROCKET COMPANIES, a financial technology platform, has proven to be resilient even amidst the current interest rate and mortgage convexity uncertainty. On Friday, its stock opened at $8.7 and closed at $9.0, up 2.6% from the previous closing price of 8.7. This suggests that investors have faith in the platform’s ability to withstand market swings even in uncertain economic times.
In addition, the growth of their stock also reflects investor confidence in the company’s ability to innovate and capitalize on new opportunities despite the current volatility. With new product offerings and a focus on customer experience, ROCKET COMPANIES is well-positioned to continue to thrive through any economic climate in the future. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Rocket Companies. More…
| Total Revenues | Net Income | Net Margin |
| – | -25.82 | – |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Rocket Companies. More…
| Operations | Investing | Financing |
| 10.82k | 578.74 | -12.82k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Rocket Companies. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 21.2k | 13.09k | – |
Key Ratios Snapshot
Some of the financial key ratios for Rocket Companies are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 4.5% | – | – |
| FCF Margin | ROE | ROA |
| – | – | – |
Analysis – Rocket Companies Intrinsic Stock Value
At GoodWhale, we have closely examined the fundamentals of ROCKET COMPANIES. Through our proprietary Valuation Line, we have determined that the intrinsic value of the share is around $13.2. Surprisingly, the stock is currently trading at only $9.0, indicating an undervaluation by 32.1%. This presents an attractive opportunity for investors looking to capitalize on the mispriced stock. We believe there is potential for a return on investment if the share price moves towards its true value. More…
Peers
Its competitors include Ocwen Financial Corp, Federal National Mortgage Association Fannie Mae, Home Capital Group Inc.
– Ocwen Financial Corp ($NYSE:OCN)
Ocwen Financial Corporation is a financial services holding company that, through its subsidiaries, originates and services loans. The Company’s segments include Servicing, Lending, Real Estate Owned (REO), Investment Management and Corporate.
– Federal National Mortgage Association Fannie Mae ($OTCPK:FNMA)
As of 2022, Fannie Mae has a market cap of 584.66M. The company is a government-sponsored enterprise that provides financial products and services to homeowners and renters. Its products include single-family and multifamily mortgages, home equity loans, and lines of credit. Fannie Mae was founded in 1938 and is headquartered in Washington, D.C.
– Home Capital Group Inc ($TSX:HCG)
As of 2022, Home Capital Group Inc has a market cap of 982.97M. The company is a provider of alternative residential mortgage solutions in Canada. Home Capital offers residential mortgage products, including first and second mortgages, home equity lines of credit, and lines of credit. The company was founded in 1954 and is headquartered in Toronto, Canada.
Summary
The company’s platform is strong, relying on interest rates and mortgage convexity to fuel its growth. Analysts suggest that Rocket Companies is well positioned to benefit from low-interest rates and a refinance boom. Furthermore, the company’s low fees and quick closing times have made it attractive to customers.
There is also potential for growth in other financial services, such as insurance and savings accounts. Overall, Rocket Companies appears to be a strong investment, with a bright future in the years to come.
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