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Freddie Mac (FMCC)
OTHER OTC:FMCC
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Freddie Mac
(OTC:FMCC)
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Rating:66Neutral
Price Target:
$15.50
▲(25.61% Upside)
Freddie Mac's strong financial performance, characterized by robust revenue growth and a debt-free balance sheet, is the primary driver of its stock score. However, the technical analysis indicates potential overbought conditions, and the negative P/E ratio reflects valuation concerns. The absence of earnings call insights and corporate events further limits the score.
Freddie Mac (FMCC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.21B
Dividend YieldN/A
Average Volume (3M)4.46M
Price to Earnings (P/E)3206.3
Beta (1Y)0.56
Revenue Growth11.43%
EPS Growth41.19%
CountryUS
Employees8,076
SectorFinancial
Sector Strength70
IndustryFinancial - Mortgages
Share Statistics
EPS (TTM)-0.01
Shares Outstanding650,059,600
10 Day Avg. Volume5,232,358
30 Day Avg. Volume4,462,618
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)0.18
Price to Sales (P/S)0.09
P/FCF Ratio1.60
Enterprise Value/Market Cap421.33
Enterprise Value/Revenue34.48
Enterprise Value/Gross Profit150.56
Enterprise Value/Ebitda38.02
Forecast
1Y Price Target
$18.00Price Target Upside45.87% Upside
Rating ConsensusHold
Number of Analyst Covering2
Freddie Mac Business Overview & Revenue Model
Company DescriptionFederal Home Loan Mortgage Corporation operates in the secondary mortgage market in the United States. The company purchases single-family and multifamily residential mortgage loans originated by lenders, as well as invests in mortgage loans and mortgage-related securities. It operates through two segments, Single-family and Multifamily. The Single-family segment purchases, securitizes, and guarantees single-family loans; and manages single-family mortgage credit risk, as well as manages mortgage-related investments portfolio, single-family securitization activities, and treasury functions. This segment serves mortgage banking companies, commercial banks, regional banks, community banks, credit unions, housing finance agencies, savings institutions, and non-depository financial institutions. The Multifamily segment engages in the purchase, sale, securitization, and guarantee of multifamily loans and securities through the issuance of multifamily K and SB certificates; issuing and guarantying other securitization products; issuing other credit risk transfer products; and provision of other mortgage-related guarantees. It serves banks and other depository institutions, insurance companies, money managers, central banks, pension funds, state and local governments, real estate investment trusts, brokers and dealers, and a range of lenders. The company was founded in 1970 and is headquartered in McLean, Virginia.
How the Company Makes MoneyFreddie Mac generates revenue primarily through the securitization of mortgage loans. The company buys mortgages from lenders, pools them into mortgage-backed securities (MBS), and then sells these securities to investors. Freddie Mac earns a guarantee fee from the lenders for assuming the credit risk associated with the loans, which constitutes a significant portion of its revenue. Additionally, Freddie Mac earns income from the interest on the mortgage loans held in its investment portfolio. The company also engages in risk-sharing transactions with private investors, which can provide further capital and diversify its risk exposure. Partnerships with banks, mortgage lenders, and institutional investors are crucial to Freddie Mac's operations, as they facilitate the acquisition of loans and the distribution of MBS to the market.
Freddie Mac Earnings Call Summary
Earnings Call Date:Jul 31, 2025
(Q3-2024)
| % Change Since: |
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Positive
Freddie Mac's Q3 2024 earnings call presented strong financial growth and effective execution of its mission to support affordable housing, despite minor increases in delinquency rates and decreased noninterest income due to lower investment gains.Q3-2024 Updates
Positive Updates
Strong Net Income Growth
Freddie Mac reported a net income of $3.1 billion for Q3 2024, representing a 16% increase year-over-year, driven by higher net revenues and lower noninterest expenses.
Increased Net Worth
The company's net worth increased to $56 billion, a 26% increase year-over-year.
Single Family Segment Performance
The single family segment reported net income of $2.6 billion, up 11% from the prior year quarter. New business activity increased by 15% to $98 billion.
Multifamily Segment Growth
Multifamily net income was $532 million, up 47% year-over-year, with a 5% increase in the multifamily mortgage portfolio to $452 billion.
Affordable Housing Initiatives
51% of eligible purchase and refinance loans were affordable to low and moderate income families, and 94% of eligible rental units financed were affordable.
Negative Updates
Slight Increase in Delinquency Rates
The single-family serious delinquency rate increased by 4 basis points to 54 basis points. The multifamily delinquency rate increased by 1 basis point to 39 basis points.
Lower Investment Gains
There was a $102 million decrease in noninterest income, primarily due to lower investment gains compared to the prior year.
Company Guidance
In the third quarter of 2024, Freddie Mac reported robust financial performance, earning $3.1 billion, which marked a 16% year-over-year increase in net income. The company's net worth rose to $56 billion, supported by net revenues of $5.8 billion, up 3% from the previous year. This growth was driven by a 5% increase in net interest income, attributed to lower debt-related expenses and mortgage portfolio expansion, which reached $3.5 trillion. The single-family segment reported $2.6 billion in net income, with a 2% portfolio increase, while the multifamily segment achieved a 47% rise in net income, largely due to a credit reserve release. Freddie Mac continued its commitment to affordable housing, with 51% of home purchases supporting first-time buyers and 68% of financed multifamily units affordable to low-income families. Additionally, the company made strides in sustainability, introducing minimum lease standards for multifamily properties and offering forbearance options for homeowners affected by natural disasters.Freddie Mac Financial Statement Overview
Summary
Freddie Mac demonstrates strong financial health with robust revenue and net income growth. The company's debt-free position enhances its stability, although its low equity ratio suggests high leverage which may pose risks in unfavorable market conditions. Cash flows remain stable but indicate potential room for improvement in cash conversion efficiency.Income Statement
Freddie Mac has shown impressive revenue growth with a recent increase from $22.1 billion to $23.9 billion, representing an 8.2% growth rate. The net profit margin has expanded significantly, reaching 74% in the latest report, indicating strong profitability. However, the absence of EBIT and EBITDA margins in the most recent report limits the analysis of operational efficiency.85
Very Positive
Balance Sheet
The balance sheet is strong with zero total debt reported in the latest period, reflecting excellent leverage management. The equity ratio stands at 1.76%, which is low, indicating high asset leverage. Return on equity is robust at 29.7%, showcasing effective equity utilization. However, the low equity ratio could pose risks during economic downturns.78
Positive
Cash Flow
Freddie Mac's cash flow exhibits stability with consistent free cash flow, though it showed a decrease from $7.6 billion to $6.6 billion year over year. The operating cash flow to net income ratio is relatively low, suggesting potential challenges in converting profits into cash.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 100.30B | 120.27B | 21.23B | 21.26B | 21.95B | 16.66B |
| Gross Profit | 22.97B | 23.44B | 21.23B | 19.42B | 21.95B | 16.66B |
| EBITDA | 90.96B | 112.92B | 13.20B | 77.06B | 15.20B | 9.23B |
| Net Income | 11.51B | 11.86B | 10.54B | 9.33B | 12.11B | 7.33B |
Balance Sheet | ||||||
| Total Assets | 3.44T | 3.39T | 3.28T | 3.21T | 3.03T | 2.63T |
| Cash, Cash Equivalents and Short-Term Investments | 6.86B | 61.30B | 5.04B | 12.19B | 12.47B | 21.88B |
| Total Debt | 3.35T | 3.30T | 3.21T | 3.15T | 2.98T | 2.59T |
| Total Liabilities | 3.37T | 3.33T | 3.23T | 3.17T | 3.00T | 2.61T |
| Stockholders Equity | 64.81B | 59.58B | 47.72B | 37.02B | 28.03B | 16.41B |
Cash Flow | ||||||
| Free Cash Flow | 14.52B | 6.63B | 7.62B | 11.93B | 16.35B | 907.00M |
| Operating Cash Flow | 14.52B | 6.63B | 7.62B | 11.93B | 16.35B | 907.00M |
| Investing Cash Flow | -11.79B | 9.62B | 44.25B | 11.40B | 24.25B | -83.36B |
| Financing Cash Flow | -4.00B | -16.74B | -52.21B | -27.11B | -54.34B | 101.15B |
Freddie Mac Technical Analysis
Positive
12.34
Price Trends
9.65
Positive
8.44
Positive
6.69
Positive
Market Momentum
0.79
Positive
56.65
Neutral
44.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FMCC, the sentiment is Positive. The current price of 12.34 is above the 20-day moving average (MA) of 12.32, above the 50-day MA of 9.65, and above the 200-day MA of 6.69, indicating a bullish trend. The MACD of 0.79 indicates Positive momentum. The RSI at 56.65 is Neutral, neither overbought nor oversold. The STOCH value of 44.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FMCC.
Freddie Mac Risk Analysis
Freddie Mac disclosed 2 risk factors in its most recent earnings report. Freddie Mac reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Freddie Mac Peers Comparison
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $8.21B | 3,206.25 | 19.50% | ― | 11.43% | 41.19% | |
65 Neutral | 13.58B | 24.27 | 11.18% | ― | 2.27% | -17.46% | |
64 Neutral | 6.41B | 16.99 | 8.13% | 0.97% | 20.77% | 96.22% | |
61 Neutral | 41.06B | -400.62 | >-0.01% | ― | 21.52% | -103.65% | |
58 Neutral | 1.04B | -9.25 | -15.29% | ― | 6.60% | 44.77% | |
53 Neutral | 9.98B | -94.12 | 6.73% | 6.41% | 12.27% | -21.43% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
Performance Comparison
FMCC
Freddie Mac
12.34
11.17
954.70%
PFSI
PennyMac Financial
124.04
11.58
10.30%
COOP
Mr Cooper Group
212.26
121.19
133.07%
LDI
loanDepot
3.13
0.44
16.36%
UWMC
UWM Holding
6.24
-1.54
-19.79%
RKT
Rocket Companies
19.51
1.60
8.93%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.