M&A Watch: Buy the Surge in Rocket Companies (RKT) Stock?

As the broader market continued to fall Rocket Companies RKT stock spiked over +10% on Friday and has now soared +35% in 2025 to over $15 a share.

Leading to bullish investor sentiment is that Rocket Companies recently announced its plans to acquire Redfin RDFN and Mr. Cooper Group COOP which will create a one-stop shop for the end-to-end homeownership experience.

In addition to this, the plausibility of more rate cuts has led to even more optimism surrounding the mortgage service providers' expansion. With President Trump urging Fed Chair Jerome Powell that now is the time to cut rates following his “Liberation Tariffs”, Rocket Companies has been a bellwether in the stock market as the S&P 500 and Nasdaq fell another 5% in today’s trading session.

Redfin & Mr. Cooper Group Acquisitions

By integrating Redfin’s real estate search platform, Rocket Companies aims to simplify the home-buying process and attract more customers. The acquisition is expected to be completed during Q2 or Q3 in an all-stock transaction that values Redfin's stock at $12.50 per share or $1.75 billion.

With Mr. Cooper Group being one of America’s largest mortgage servicers, this acquisition will also expand Rocket Companies' customer base and complement its pre-existing mortgage services. Pending regulatory approval, Rocket Companies will be acquiring Mr. Cooper Group later in the year as well. This will also be an all-stock transaction deal that values Mr. Cooper Group’s stock at $143 per share or $9.4 billion.

It’s also noteworthy that the merger between Rocket Companies and Mr. Cooper Group will create a combined mortgage portfolio of over $2 trillion in unpaid principal balances, serving nearly 10 million customers.

Tracking Rocket Companies Outlook 

Rocket Companies' total sales are currently expected to increase 13% in fiscal 2025 and are projected to soar another 21% in FY26 to $7.11 billion. Furthermore, acquiring Redfin and MR. Cooper Group would add over $3 billion in annual revenue. 

On the bottom line, annual earnings are expected to soar 100% this year to $0.46 a share compared to EPS of $0.23 in 2024. Plus, FY26 EPS is projected to pop another 69% to $0.78.

Monitoring Rocket Companies Balance Sheet

Taking a look at Rocket Companies' balance sheet, the company has $1.28 billion in cash & equivalents. Rocket Companies' total assets stand at $24.51 billion and are nicely above its total liabilities of $15.46 billion which includes $10.84 billion in long-term debt.

Conclusion & Final Thoughts

At the moment, Rocket Companies stock lands a Zacks Rank #3 (Hold). Undoubtedly, Rocket Companies should create long-term value for shareholders by acquiring Redfin and Mr. Cooper Group but there could be better buying opportunities ahead after such a sharp YTD rally.  
 

Notably, holding Redfin and Mr. Cooper Group stock may be advantageous considering their acquisition stock prices reflect a premium of 23% and 8% respectively.   

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research