Rocket Companies Stock Rises Amid Major Acquisition Plans
Despite a declining broader market, Rocket Companies RKT saw its stock surge over +10% on Friday, climbing +35% in 2025, now trading at over $15 per share.
This bullish investor sentiment follows Rocket Companies’ announcement of plans to acquire Redfin RDFN and Mr. Cooper Group COOP, aiming to offer a comprehensive solution for the homeownership process.
Furthermore, potential interest rate cuts have increased optimism around the growth of mortgage service providers. Former President Trump’s call for Fed Chair Jerome Powell to lower rates, based on his “Liberation Tariffs,” positions Rocket Companies as a bellwether in a market where the S&P 500 and Nasdaq experienced a further 5% drop in trading.
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Acquisitions of Redfin & Mr. Cooper Group
The integration of Redfin’s real estate search platform will streamline the home-buying process for Rocket Companies. The acquisition, valued at $1.75 billion and priced at $12.50 per share of Redfin’s stock, is anticipated to close in Q2 or Q3 of the fiscal year.
In addition, acquiring Mr. Cooper Group, one of America’s leading mortgage servicers, will broaden Rocket Companies’ customer base and enhance its existing mortgage offerings. This all-stock transaction aligns with Rocket’s strategic goals and is subject to regulatory approval. Mr. Cooper Group’s stock is valued at $143 per share, totaling $9.4 billion.
The merger with Mr. Cooper Group is significant; together, they will boast a mortgage portfolio exceeding $2 trillion in unpaid principal balances, serving nearly 10 million customers.
Outlook for Rocket Companies
Sales projections for Rocket Companies suggest a 13% increase in fiscal 2025, with an anticipated rise of another 21% in FY26, culminating in $7.11 billion. The acquisitions of Redfin and Mr. Cooper Group are expected to contribute over $3 billion in annual revenue.
On the earnings side, projections indicate annual earnings could double to $0.46 per share compared to $0.23 in 2024, with a further 69% increase to an anticipated $0.78 for FY26.
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Balance Sheet Overview
Rocket Companies maintains a solid balance sheet with $1.28 billion in cash and equivalents. The total assets stand at $24.51 billion, comfortably exceeding total liabilities of $15.46 billion, which includes $10.84 billion in long-term debt.
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Conclusion
Currently, Rocket Companies holds a Zacks Rank #3 (Hold). The acquisitions of Redfin and Mr. Cooper Group are positioned to provide long-term value for shareholders, although potential investors may find more advantageous buying opportunities following the stock’s recent sharp rally.
Investors may also consider holding Redfin and Mr. Cooper Group stocks, as their acquisition prices reflect premiums of 23% and 8%, respectively.
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Rocket Companies, Inc. (RKT): Free Stock Analysis Report
Redfin Corporation (RDFN): Free Stock Analysis Report
Mr. Cooper Group Inc. (COOP): Free Stock Analysis Report
Originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
