Gilbert Pledges $1B to Detroit as Rocket Burns Cash
Dan Gilbert pledged approximately $1 billion on October 19 to redevelop Detroit's Renaissance Center while his company, Rocket Companies, carries $33.18 billion in total debt and negative $3.566 billi
Gilbert Pledges $1B to Detroit as Rocket Burns Cash
NEW YORK, October 19 —
The founder's ambitions and the company's cash position are moving in opposite directions.
- Revenue grew 91.9% year-over-year to $10.24 billion TTM via the $14.2 billion Mr. Cooper acquisition; trailing EPS is -$0.03.
- CEO Jesse Bray sold $5.69 million in shares at prices from $12.01 to $13.11; stock now at $10.71.
- Analyst consensus of $15.99 represents a 49% premium to current price; short interest is 7.6% of the float.
Acquisition Math, Not Operating Leverage
Rocket Companies built its mortgage stack through acquisition: Rocket Mortgage originates, Redfin surfaces buyers, Rocket Close handles settlement, and the $14.2 billion Mr. Cooper deal made it the country's largest servicer with close to 10 million homeowners. Revenue on a trailing basis hit $10.24 billion, up 91.9% year-over-year; per a Yahoo Finance analysis, the gain traces to Mr. Cooper rather than organic origination. Return on equity is roughly 3%, trailing EPS is -$0.03. More than one in five listed homes carried a price cut, a Redfin record. Revenue arrived; profit has not.
The Selling Pattern
Jesse Bray, President and CEO of Rocket Mortgage, sold 225,000 shares at $13.11 on September 15, then 132,700 at $12.01 on October 1 and 92,300 at $12.39 on October 2, totaling $5.69 million. The stock trades at $10.71, below every price at which Bray sold, and no insider made an open-market purchase in the same 90-day period.
| Ticker | Mkt cap | Fwd P/E | 52-wk |
|---|---|---|---|
| RKT | $30.3B | 13.6x | -37.1% |
| DKNG | $9.8B | 11.6x | -43.8% |
| WKHS | $29M | n/a | -80.0% |
| FSLY | $3.7B | 35.8x | +171.4% |
| FUBO | $243M | 17.9x | -81.7% |
| PTON | $2.3B | 22.1x | -30.1% |
The Conversion Bet
The analyst consensus of $15.99, a 49% premium to the current price, encodes a bet that 10 million serviced homeowners eventually generate real cash, the kind of scenario a DCF calculator puts in sharp relief. Per the October 19 announcement, Gilbert will receive no repayment and no profits from the Detroit project; operating cash flow would need to reverse from negative $634 million trailing for Rocket's shareholders to see a comparable commitment to capital return. The stock fell 30% over six months through October 13, against a 14% S&P 500 gain. Run the free Rocket Companies, Inc. deep-dive →
Basis Report is independent research for informational purposes. It is not investment advice and not a recommendation to buy or sell any security.
Frequently Asked Questions
What is Rocket Companies total debt?
Rocket Companies carries $33.18 billion in total debt while generating negative $3.566 billion in trailing free cash flow. Return on equity is roughly 3% and trailing EPS is negative $0.03.
How much did Dan Gilbert pledge to Detroit?
Dan Gilbert pledged approximately $1 billion on October 19 to redevelop Detroit's Renaissance Center. Per the announcement, Gilbert will receive no repayment and no profits from the project.
What is the analyst price target for Rocket stock?
Analyst consensus on Rocket stock is $15.99, representing a 49% premium to the current price of $10.71. Short interest is 7.6% of the float.
Did Rocket beat earnings expectations?
Rocket's most recent quarter reported EPS of $0.16, missing the $0.164 estimate and ending a three-quarter beat streak that had run 23% to 42% above consensus.
Is CEO Jesse Bray buying or selling stock?
CEO Jesse Bray sold $5.69 million in shares between September 15 and October 2 at prices ranging from $12.01 to $13.11, with no insider purchases in the same 90-day period.
Dan Gilbert, founder and chairman of Rocket Companies, pledged approximately $1 billion to redevelop Detroit's Renaissance Center on October 19 — the same day the company's shares trade 49% below the analyst consensus target and ahead of its next earnings report. The gap between the founder's philanthropic ambition and the company's $3.566 billion free cash flow deficit is the story.