Is RKT a good stock to buy? 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 $15.15 as of March 11th. RKT’s trailing and forward P/E were 213.57 and 18.45, respectively according to Yahoo Finance.

Rocket Companies, Inc., a fintech company, engages in the mortgage, real estate, and personal finance businesses in the United States and Canada. RKT is attracting attention from sophisticated investors ahead of its Q4 and full-year 2025 earnings, scheduled for February 26, 2026. A large options trade highlights this, with an institutional investor selling 8,500 contracts of $RKT $15 Puts expiring February 27, 2026, collecting $0.27 per contract, or roughly $229,500.

The timing of the trade is key: options premiums spike before earnings due to heightened uncertainty, known as implied volatility (IV). By selling these puts, the trader positions to benefit from the inevitable IV collapse immediately after earnings, a setup often referred to as an “IV crush.”

The trade carries a substantial margin of safety. With RKT trading around $18.15, the $15 strike is deep out-of-the-money, meaning the stock would need to drop roughly 20% in a single day for the position to lose money, an unlikely scenario for a company of this scale. Even a moderate earnings miss would not threaten this position significantly, giving the trader a statistical cushion while generating immediate cash flow.

Recent macro concerns, including uncertainty around the next Federal Reserve Chair and weaker sector peers like PennyMac, have pressured $RKT shares from 52-week highs. The smart money here appears to be fading the panic, betting that recent weakness has already priced in the worst-case scenario for the mortgage market.

With housing demand showing signs of recovery and government proposals supporting mortgage affordability, the fundamentals suggest limited downside. This trade exemplifies a high-probability, short-duration cash flow play, where the trader either keeps the premium or acquires a leading mortgage company at a significant discount, combining both safety and asymmetric upside in a concentrated, strategic bet.

Previously, we covered a bullish thesis on Rocket Companies, Inc. (RKT) by Unemployed Value Degen in December 2024, which highlighted RKT’s potential to benefit from a home equity loan boom, its resilient mortgage servicing portfolio, and tech-driven cost efficiencies. RKT’s stock price has appreciated by approximately 6.84% since our coverage. OppCost shares a similar view but emphasizes a short-term options trade ahead of earnings, capturing immediate cash flow while leveraging the company’s fundamentals.

Rocket Companies, Inc. is on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 114 hedge fund portfolios held RKT at the end of the fourth quarter which was 77 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.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW

Disclosure: None.