Freddie Mac (FMCC) AI Stock Analysis

• Market Cap: $3.79B
• Dividend Yield: N/A
• Average Volume (3M): 1.66M
• Price to Earnings (P/E): 3206.3
• Beta (1Y): 0.73
• Revenue Growth: 12.36%
• EPS Growth: 37.92%
• Country: US
• Employees: 8,076
• Sector: Financial
• Sector Strength: 81
• Industry: Financial - Mortgages
• EPS (TTM): -0.01
• Shares Outstanding: 650,059,600
• 10 Day Avg. Volume: 1,551,287
• 30 Day Avg. Volume: 1,658,337
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.27
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.47
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $4.50
• Price Target Upside: -42.01% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1

• Rating: 58 Neutral
• Price Target: ―

Freddie Mac's strong financial performance, characterized by robust revenue and net income growth, supports its stability, although the high leverage poses a potential risk. Technical analysis shows mixed signals, providing some positive momentum, but the extremely high P/E ratio raises significant valuation concerns. The absence of a dividend yield further impacts the stock's attractiveness.

Freddie Mac Business Overview & Revenue Model

Company Description

Federal 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 Money

Freddie Mac generates revenue primarily through its securitization activities, where it purchases mortgage loans from lenders, pools them, and sells them as mortgage-backed securities (MBS) to investors. This process provides lenders with capital, enabling them to originate more loans. Freddie Mac earns fees for guaranteeing the timely payment of principal and interest on these securities, which is a significant source of revenue. Additionally, the company invests in mortgage loans and MBS for its own portfolio, generating interest income. Freddie Mac also benefits from partnerships with various financial institutions and government agencies, which help facilitate its operational and revenue-generating activities.

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.

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.

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.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
123.76B	23.91B	22.10B	21.26B	21.95B	16.66B
	Gross Profit
73.49B	23.91B	21.23B	21.26B	21.95B	16.66B
	EBIT
66.33B	0.00	20.50B	77.06B	15.20B	9.23B
	EBITDA
115.99B	112.92B	0.00	77.06B	15.20B	9.23B
	Net Income Common Stockholders
11.89B	11.86B	10.54B	9.33B	12.11B	7.33B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
63.84B	61.30B	5.04B	12.19B	12.47B	21.88B
	Total Assets
3.41T	3.39T	3.28T	3.21T	3.03T	2.63T
	Total Debt
0.00	3.30T	3.21T	3.15T	2.98T	2.59T
	Net Debt
3.32T	3.30T	3.21T	3.14T	2.97T	2.59T
	Total Liabilities
3.35T	3.33T	3.23T	3.17T	3.00T	2.61T
	Stockholders Equity
62.40B	59.58B	47.72B	37.02B	28.03B	16.41B
Cash Flow		Free Cash Flow
7.30B	6.63B	7.62B	11.93B	16.35B	907.00M
	Operating Cash Flow
7.30B	6.63B	7.62B	11.93B	16.35B	907.00M
	Investing Cash Flow
7.19B	9.62B	44.25B	11.40B	24.25B	-83.36B
	Financing Cash Flow
-13.23B	-16.74B	-52.21B	-27.11B	-54.34B	101.15B

Freddie Mac Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7.76
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 7.76 is above the 20-day moving average (MA) of 5.62, above the 50-day MA of 5.39, and above the 200-day MA of 3.56, indicating a bullish trend. The MACD of 0.43 indicates Negative momentum. The RSI at 77.91 is Negative, neither overbought nor oversold. The STOCH value of 79.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FMCC.

Freddie Mac Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
COOP	68 Neutral	$8.16B	14.48	12.39%	―	6.44%	-7.86%
Sector *	64 Neutral	$12.66B	9.79	7.67%	17015.07%	12.23%	-6.06%
PFSI	62 Neutral	$4.93B	14.63	9.32%	1.14%	23.79%	121.61%
FMCC	58 Neutral	$3.79B	3,206.25	21.06%	―	12.36%	37.92%
RKT	53 Neutral	$25.14B	68.51	0.45%	―	24.58%	-88.86%
GHLD	51 Neutral	$793.80M	18.38	3.71%	3.89%	42.92%	64.72%
UWMC	41 Neutral	$6.78B	37.74	-5.74%	10.07%	9.19%	-171.38%

Freddie Mac Corporate Events

Freddie Mac Announces Cash Tender Offer for STACR Notes

On April 30, 2025, Freddie Mac announced a fixed-price cash tender offer for the purchase of certain STACR Notes, with the offer set to expire on May 6, 2025. This move, involving BofA Securities, Wells Fargo Securities, and CastleOak Securities as dealer managers, aims to manage Freddie Mac’s credit risk exposure and optimize its financial operations.

Spark’s Take on FMCC Stock

According to Spark, TipRanks’ AI Analyst, FMCC is a Neutral.

Freddie Mac’s strong financial performance, characterized by robust revenue and net income growth, supports its stability, although the high leverage poses a potential risk. Technical analysis shows mixed signals, providing some positive momentum, but the extremely high P/E ratio raises significant valuation concerns. The absence of a dividend yield further impacts the stock’s attractiveness.

To see Spark’s full report on FMCC stock, click here.

Freddie Mac Appoints New Vice-Chair to Board

On April 9, 2025, Freddie Mac‘s Board of Directors appointed David S. Farbman as Vice-Chair of the Board and announced the constitution of its Board committees. These changes reflect Freddie Mac’s ongoing efforts to strengthen its governance and leadership structure, potentially impacting its strategic direction and stakeholder engagement.

Spark’s Take on FMCC Stock

According to Spark, TipRanks’ AI Analyst, FMCC is a Neutral.

Freddie Mac shows strong financial performance with robust revenue growth and a debt-free position. However, its high leverage and cash conversion issues pose potential risks. Technical indicators suggest a neutral-to-positive outlook, while valuation concerns due to an exceptionally high P/E ratio limit its appeal. Recent positive corporate events, including key leadership appointments, contribute positively to the overall score.

To see Spark’s full report on FMCC stock, click here.

Freddie Mac Appoints Michael Parrott to Board

On March 24, 2025, Grace A. Huebscher resigned from the Freddie Mac Board of Directors, where she was Chair of the Risk Committee and a member of several other committees. Subsequently, on March 28, 2025, Michael Parrott was appointed to the Board by the U.S. Federal Housing Finance Agency, acting as Conservator. This change in the board’s composition may impact Freddie Mac’s governance and strategic direction.

Freddie Mac Announces Board Changes with New Appointment

On March 19, 2025, Christopher E. Herbert resigned from the Freddie Mac Board of Directors, where he was the Chair of the Mission and Housing Sustainability Committee. On the same day, the Federal Housing Finance Agency appointed David Farbman to the board as a non-executive director, with compensation details outlined in Freddie Mac’s 2024 Annual Report. This change in the board’s composition may influence Freddie Mac’s strategic direction and governance.

Freddie Mac Appoints Michael Hutchins as Interim CEO

On March 20, 2025, the Federal Housing Finance Agency appointed Michael T. Hutchins as the Interim Chief Executive Officer of Freddie Mac, while he continues his role as President. Hutchins, who has been with the company since 2013, brings extensive experience in financial services to his expanded role. Concurrently, the company announced the departure of CEO Diana Reid, who also stepped down from the Board of Directors, marking a significant leadership transition for Freddie Mac.

Freddie Mac Appoints New Board Chair and Members

On March 17, 2025, the Federal Housing Finance Agency appointed four new members to the Freddie Mac Board, including William J. Pulte as Board Chair. This change in leadership, which also involved the removal of six existing board members, is expected to impact Freddie Mac’s governance structure and strategic direction.