Rocket Companies, Inc. (RKT): A Bull Case Theory 

We came across a bullish thesis on Rocket Companies, Inc. on R. Dennis’s Substack by OppCost. In this article, we will summarize the bulls’ thesis on RKT. Rocket Companies, Inc.’s share was trading at $20.76 as of January 28th. RKT’s trailing and forward P/E were 300.43 and 26.32 respectively according to Yahoo Finance.

Rocket Companies, Inc., provides spanning mortgage, real estate, and personal finance services in the United States and Canada. RKT sits at a pivotal moment in its evolution after enduring one of the most volatile cycles in U.S. housing finance. Following the pandemic refinancing boom and the sharp rate-driven downturn that followed, Rocket has repositioned itself from a highly cyclical mortgage originator into a vertically integrated, technology-driven real estate and financial services platform.

The acquisitions of Mr. Cooper, completed in October 2025, and Redfin mark a decisive strategic shift, anchoring Rocket’s model around a diversified ecosystem that spans home search, mortgage origination, servicing, and personal finance. Central to the thesis is the “Rocket Flywheel,” which captures consumers early in the homeownership journey and monetizes them across multiple touchpoints.

Redfin provides top-of-funnel traffic, Rocket Mortgage drives high-margin origination, and Mr. Cooper’s $2.1 trillion servicing portfolio delivers stable, recurring cash flows that hedge interest rate volatility and enable low-cost refinancing recapture when rates fall, supported by proprietary AI tools like Rocket Logic and Pathfinder.

Financially, Rocket has demonstrated resilience through the cycle, with revenue recovering to roughly $5.5 billion TTM by Q3 2025 and adjusted EBITDA rebounding despite GAAP losses driven by MSR valuation swings and merger-related costs. A fortress liquidity position and an extended debt maturity profile underpin balance sheet strength, while the scale of servicing materially dampens earnings volatility relative to peers.

However, valuation remains nuanced, as Rocket trades at a premium to traditional lenders, reflecting its fintech aspirations but also ongoing sensitivity to gain-on-sale margins, heavy software investment, and significant integration risk. Successful execution on Mr. Cooper and Redfin integration, alongside AI-driven cost decoupling, could justify this premium by delivering durable cash flows and operating leverage. If realized, Rocket’s transformed platform positions it as a structurally stronger, more defensive leader poised to compound value across the next housing cycle.

Previously, we covered a bullish thesis on Rocket Companies, Inc. (RKT) by Unemployed Value Degen in December 2024, which highlighted the company’s exposure to a potential home equity loan boom, servicing-driven resilience, and upside from falling mortgage rates. RKT’s stock price has appreciated by approximately 46.40% since our coverage due to improving housing sentiment. OppCost shares a similar thesis but emphasizes platform integration and the Rocket Flywheel strategy.

Rocket Companies, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 77 hedge fund portfolios held RKT at the end of the third quarter which was 56 in the previous quarter. While we acknowledge the risk and potential of RKT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RKT and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.