RKT
Rocket Companies, Inc.
$14.74
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 19.0% above fair value
You pay
$14.74
Bear
$9.90
Fair
$12.39
Bull
$14.86
Bear
$9.90
-32.8%
$0.67 × 12x P/E
Fair
$12.39
-15.9%
$0.67 × 15x P/E
Bull
$14.86
+0.8%
$0.67 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
22.1x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $19.50 from 25 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $12.39 per share.
Warnings
Wall Street's average price target is $19.50 (from 25 analysts). Our estimate is 49% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples