Rocket Companies Gains Market Share Despite Housing Slump, Well-Positioned for Rebound
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Rocket Companies gained market share in mortgage originations and refinancing despite weak housing market conditions in 2022. Market share now 12.1% in refinancing and 3.7% in purchases.
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Company has cut costs, with employee count down by nearly 50% from 2021 peak. Q4 adjusted EBITDA was positive.
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Strong balance sheet with $3.6B in cash. Guidance calls for 16% revenue growth in Q1 2024.
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Consensus forecasts call for accelerating growth in 2024-2026 driven by rebound in housing market and mortgage activity. Stock trades at 39x forward P/E.
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Big uncertainty is path of mortgage rates and housing demand. Additional housing market weakness poses downside risk despite strengths of Rocket's platform.