Rocket Companies, Inc. operates mortgage origination, servicing and related consumer-fintech businesses and is characterized by large per-share revenue volatility, strong historical cash conversion and currently thin-to-negative operating profitability.
The company has shown meaningful top-line recovery and per-share momentum: revenue rose quarter-to-quarter to $2.94B in 2026-03-31 and revenue per share growth re-accelerated to 40.1% (1-year, 2026-03-31), indicating renewed sales velocity after prior troughs [Revenue & Net Income] [EPS Diluted & Revenue per Share].
Its balance sheet shows conservative nominal leverage with debt-to-equity of 0.6837 and reported net debt effectively 0.00, and the historical cash-generation profile is notable — operating cash flow was $7.74B (TTM at 2021-12-31) and the cash conversion ratio metric registers 25.1255, reflecting episodes where cash from operations materially exceeded reported net income [Earnings Quality Analysis] [Strategic Capital Allocation].
Material areas of weakness include profitability and liquidity/valuation. Profitability metrics are under pressure: gross margin was -3.2% and operating margin -24.7% for the period ending 2025-12-31 while reported net income swung to a -$123.9M loss in 2025-09-30 after a modest $29.4M (TTM) in 2024-12-31, illustrating volatile and currently negative operating results [Profit Margin Trends] [Revenue & Net Income].
Liquidity and market expectations also deserve attention: the current ratio stands at 0.3890 and trailing P/E expanded to 54.1x as of 2024-12-31, while return on equity remains near zero at 0.3% (TTM 2024-12-31), signaling tight short-term liquidity and an elevated valuation backdrop relative to near-term profitability [Return on Equity (ROE)] [Price-to-Earnings (PE) Ratio Trend].
Key fundamental metrics to monitor going forward are the alignment of operating cash flow versus net income (compare most recent operating cash flow and the $29.4M TTM net income / recent quarterly losses) and whether gross and operating margins improve from -3.2% and -24.7% respectively, along with continued revenue-per-share trends (40.1% YoY) and recovery in ROE from 0.3%; additionally, watch the current ratio (0.3890) and the trailing P/E (54.1x) for signs of improving liquidity and valuation normalization [Earnings Quality Analysis] [Profit Margin Trends] [Revenue & EPS Growth] [Return on Equity (ROE)] [Price-to-Earnings (PE) Ratio Trend].
The foundation of business quality and long-term value creation
Rocket Companies, Inc.'s revenue shows a clear upward trajectory across the most recent quarters: revenue rose from $1.04B (2025-03-31) to $1.36B (2025-06-30), $1.61B (2025-09-30), $2.69B (2025-12-31) and reached $2.94B in the latest quarter (2026-03-31). That series of consecutive quarterly increases follows a recent trough in early 2025 and approaches the $3.15B level observed in 2024-12-31.
By contrast, reported net income has weakened over the same recent window. Net income moved from a $29.4M profit at 2024-12-31 to a -$10.4M loss at 2025-03-31 and a larger -$123.9M loss at 2025-09-30, indicating worsening bottom-line results despite rising revenue. The most recent quarterly revenue was $2.94B (2026-03-31). The most recent reported net income was -$123.9M (2025-09-30).
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Over the period Apr 2025 to Mar 2026, Rocket Companies Inc generates $8.60B in revenue. The waterfall below shows how revenue flows through various expense categories.
Period Information
Report Type: Annual (10-K)
Period: Apr 2025 to Mar 2026
Revenue composition by disclosure category for the latest period
Gain on sale of loans, net: revenue related to origination and subsequent sale of mortgage loans.
Interest income, net: interest earned from borrowers on mortgage loans while those loans are held for sale, partially offset by interest and fees on funding facilities.
Loan servicing income, net: contractual servicing cash flows received for servicing mortgage loans, including ancillary servicing-related revenue such as late fees and modification incentives.
Subservicing revenue: fees earned under subservicing contracts, primarily based on contractual per-loan fees.
Deposit income: income earned on cash deposits, including custodial deposits associated with the servicing portfolio.
Fees from national title production, settlement services and appraisal management provided by Rocket Close.
Fees and other revenue from Redfin’s digital real estate brokerage and home search platform, including services to connect consumers with agents, listing services, and streamlined buy/sell offerings.
Revenue from Rocket Money paying subscribers for financial wellness services such as subscription cancellation, budget management and credit score improvement.
Interest and other income generated by Rocket Loans from personal loans.
Revenue from other operations and services provided across the company’s ecosystem to clients or partners.
Recurring revenue characteristics:
Transactional or event-driven revenue characteristics:
Analyzing long-term margin stability and competitive positioning
Rocket Companies, Inc. shows negative gross and operating margins in the most recent reporting year, with gross margin at -3.2% and operating margin at -24.7% for the period ending 2025-12-31. Net profit margin is near break-even in the latest available data, at 0.6% for the period ending 2024-12-31. The most recent observations indicate the company is currently reporting losses at the gross and operating levels while net margin has moved close to zero.
Looking back, net profit margin was substantially higher in 2021 (23.2%) before declining to -0.4% in 2023 and recovering slightly to 0.6% in 2024. Operating margin improved from -87.1% in 2021 to -24.7% in 2025, while gross margin fell from 2.1% in 2021 to -3.2% in 2025. The most recent gross margin was -3.2% (2025-12-31), the most recent operating margin was -24.7% (2025-12-31), and the most recent net profit margin was 0.6% (2024-12-31).
Understanding Profit Margins
Between Apr 2025 and Mar 2026, Rocket Companies Inc converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
Rocket Companies, Inc. shows significant variation in net income (TTM) over the sample period. The peak was $308.2M at 2021-12-31, which then declined into negative territory with -$15.5M for 2023-12-31, before rebounding to \$29.4M at 2024-12-31. The key inflection points include the drop from positive earnings in 2021 to a loss by 2023, followed by a modest recovery in 2024.
Data shows that operating cash flow (TTM) was available only through 2021, with a value of $7.74B at 2021-12-31. Earlier, it was -$1.68B at 2020-12-31. While 2021 operating cash flow substantially exceeded reported net income, data for 2023–2024 is not available, preventing recent assessment of alignment between earnings and cash generation.
Most recent Net Income (TTM): $29.4M at 2024-12-31
Most recent Operating Cash Flow (TTM): $7.74B at 2021-12-31
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
Trailing Twelve Months
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
Rocket Companies, Inc.'s trailing twelve-month return on equity fell from 3.2% at year-end 2021 to -0.2% at year-end 2023, representing a clear inflection into negative ROE. The most notable inflection point is the move from positive ROE in 2021 to negative ROE by 2023.
In the most recent quarter, the company recorded a slight recovery, with ROE rising to 0.3% at 2024-12-31, leaving the metric close to zero after the prior decline. The most recent trailing twelve-month return on equity was 0.3% as of 2024-12-31.
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
Rocket Companies, Inc. shows divergent cash-flow patterns across the three TTM categories. Operating cash flow moved from a negative TTM in 2020 (−$1.68B) to a large positive TTM by period end 2021 ($7.74B), with no later operating TTM figures reported in the dataset. Investing cash flow was negative in 2021 (−$664.9M) but shifted to positive TTM values by period end 2022 ($578.7M), with an earlier positive TTM of $517.2M reported for 2020. Financing cash flow on a TTM basis rose from $3.28B at period end 2024 to $8.10B at period end 2025, representing the most recent and material increase in the dataset.
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Trailing Twelve Months
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
Rocket Companies, Inc.'s trailing twelve-month price-to-earnings ratio shows a marked change in the available data series: a reported 6.4x at period end , no value provided for period end in the dataset, and a much higher reading of 54.1x at period end . The most notable inflection is the jump between the last reported 2021 value and the 2024 value, with the 2023 entry blank in the record.
The most recent data point is substantially higher than the earlier reported 6.4x, indicating the current P/E level is elevated relative to the prior available observation. The most recent reported P/E ratio was 54.1x.
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.