Investors should not overlook stocks trading near highs, as they may be on the brink of a significant move. The key is to consider the price-to-earnings-growth (PEG) ratio, which accounts for valuation multiples in relation to expected future earnings. Rocket Companies Inc. (NYSE: RKT) is a stock showing breakout potential due to its low PEG ratio and positive earnings outlook.

Rocket Companies stands out despite challenges in the housing market, with expectations of significant EPS growth ahead. The company reported 4 cents in earnings per share for the latest quarter, surpassing market expectations. Analysts project Rocket to triple its EPS by the fourth quarter of 2025, with a PEG ratio indicating that only 10% of its future growth has been priced in so far.

Institutional investors have shown confidence in Rocket Companies, with $416 million in institutional buying over the recent quarter. Boston Partners notably increased their holdings by 6.2%, reflecting a strong belief in the company’s future potential. With a gap between current prices and projected growth, Rocket Companies presents a compelling investment opportunity for those looking to capitalize on its growth trajectory.

Read more at Nasdaq: Rocket Stock Just Broke Out, But EPS Growth Still Isn’t Priced In