Zacks Industry Outlook Highlights Rocket Companies and Lending Tree

For Immediate ReleaseChicago, IL – October 29, 2025 – Today, Zacks Equity Research discusses Rocket Companies RKT and Lending Tree TREE.Industry: Mortgage ServicesLink: https://www.zacks.com/commentary/2778096/2-stocks-to-watch-from-thriving-mortgage-related-services-industryAs mortgage rates continue to decline, the Zacks Mortgage & Related Services industry is benefiting from the improving trends of purchase originations and refinancing volumes.However, with rising competition, mortgage servicers continue to face pressure as they are compelled to resort to price-cutting, resulting in a reduction in sales margins. However, companies like Rocket Companies and Lending Tree are well-positioned to navigate these challenges.Industry DescriptionThe Zacks Mortgage & Related Services industry comprises providers of mortgage-related loans, refinancing, and other loan-servicing facilities. Numerous banks have been retreating from the mortgage business due to higher compliance and capital requirements. This allowed non-banks to increase their capacity to gain market share in the mortgage loans business, which accounts for the largest class of U.S. consumer debt.Players in the industry are dependent on the interest rates determined by the Federal Reserve, as prevailing rates influence customers' decisions to apply for mortgages. The companies also generate investment income from various financial assets, including residential and commercial mortgage-backed securities, as well as asset-backed securities. The firms make equity investments in mortgage-related entities, among others.3 Mortgage & Related Services Industry Trends to WatchRelatively Lower Rates to Aid Originations: Mortgage rates continue to trend lower, hitting their lowest level in over a year. At the start of 2025, the 30-year fixed-rate mortgage was above 7%, while it now hovers near 6%. This relative improvement is driving renewed interest in purchase applications, reflecting latent demand in the housing market. As origination volumes increase, operational and financial pressures on mortgage and related services industry participants are expected to ease, leading to higher gain-on-sale margins and expanded investment activity.Refinancing Activities Witnessing Improving Trend: The Federal Reserve reduced rates by 25 basis points in September 2025 and signaled two more cuts by the year-end. With this, housing affordability challenges are expected to decline with a fall in mortgage rates. With rates trending lower than the year-ago level and balanced supply/affordability playing out in the mortgage market, demand is set to increase in the coming days. The decline in rates will increase prospective home buyers’ purchasing power and allow existing homeowners to refinance. The rise in refinancing activities will support industry players' top-line growth.Competition Picks Up: Per an MBA forecast, U.S. single-family mortgage debt outstanding is expected to see an increasing trend in the upcoming years. This is anticipated to be primarily driven by house price appreciation. While this typically results in growth of the single-family mortgage portfolio for industry players, the competitive landscape of the mortgage services industry is likely to be a deterrent. With tighter margins, many originators may struggle to be profitable in the upcoming period.Zacks Industry Rank Reflects Bright ProspectsThe Zacks Mortgage & Related Services industry, housed within the broader Zacks Finance sector, currently carries a Zacks Industry Rank #95, which places it in the top 39% of more than 243 Zacks industries.The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates drab near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Before we present a couple of stocks you may want to consider for your portfolio, let us look at the industry’s recent stock-market performance and valuation picture.Industry Underperforms Sector & S&P 500The Zacks Mortgage & Related Services industry has underperformed the broader Zacks Finance sector and the S&P 500 composite in the past year.The industry has rallied 15.9% in this period compared with the broader sector's growth of 16.7% and the S&P 500 composite’s rise of 20.5%.Industry's Current ValuationOn the basis of the price-to-book ratio (P/B), which is commonly used for valuing mortgage and related services companies, the industry currently trades at 6.58X compared with the S&P 500's 8.93X.Over the last five years, the industry traded as high as 13.28X, as low as 2.04X, and at the median of 4.25X.As finance stocks typically have a lower P/B ratio, comparing mortgage and related services companies with the S&P 500 may not make sense to many investors. However, comparing the group's P/B ratio with that of its broader sector ensures that the group is trading at a premium.The Zacks Finance sector's trailing 12-month P/B of 4.27X for the same period is below the Zacks Mortgage & Related Services industry's ratio.2 Mortgage & Related Services Stocks to WatchRocket Companies: Founded in 1985, this is a Detroit-based financial technology (fintech) platform that brings together businesses across mortgage, real estate, title, and personal finance. The company’s purchase market share is increasing, fueled by optimizations across the processes, teams, marketing, and technology, strengthening its ability to serve more homebuyers and drive sustainable growth.In October 2025, Rocket Companies acquired Mr. Cooper Group. The acquisition of Mr. Cooper expanded its homeownership platform significantly and strengthened its position as a leading mortgage servicer and originator. In January 2025, the company launched Rocket.com, offering a homeownership platform that seamlessly integrates home search, financing, and mortgage servicing into a single experience.The Zacks Consensus Estimate for RKT’s 2025 earnings is pegged at 25 cents per share, indicating an 8.7% rise from the year-ago period’s reported figure. The company’s revenues for 2025 are expected to rise 16.6% year over year. RKT currently has a Zacks Rank #2 (Buy) and a market capitalization of $37.6 billion. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.LendingTree: This parent company of LendingTree, LLC, is headquartered in Charlotte, NC, and has been operating solely in the United States since July 1998. Its online marketplace provides clients with access to product offerings from more than 600 partners. LendingTree is focusing on improving purchase conversion rates while assisting in meeting its customers’ demands for home equity loans.The company’s market-leading position and flexible business model provide further diversified solutions for a wider array of lenders. This will enable it to navigate through fluctuating macroeconomic situations and a comparatively higher interest-rate environment.TREE is committed to boosting revenues by diversifying its non-mortgage product offerings, particularly in the Consumer segment. Over the past years, the company has increased its services, such as credit cards, and widened loan offerings to personal, auto, small business, and student loans.The Zacks Consensus Estimate for TREE’s 2025 earnings has been unchanged over the past month. The Zacks Rank #3 (Hold) company’s earnings for 2025 are expected to rise 36.9% year over year. Revenues are anticipated to grow 14.9% this year. It has a market capitalization of $856.2 million.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. 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