REDWOOD TRUST INC (RWT) Stock Fundamental Analysis
USA - NYSE:RWT - US7580754023 - REIT
6.02 USD
-0.05 (-0.82%)
6.0699 USD
+0.05 (+0.83%)
Taking everything into account, RWT scores 3 out of 10 in our fundamental rating. RWT was compared to 62 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. Both the profitability and financial health of RWT have multiple concerns. RWT has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year RWT was profitable.
RWT had a negative operating cash flow in the past year.
In multiple years RWT reported negative net income over the last 5 years.
In the past 5 years RWT always reported negative operating cash flow.
1.2 Ratios
The Return On Assets of RWT (-0.40%) is worse than 64.52% of its industry peers.
The Return On Equity of RWT (-8.20%) is worse than 72.58% of its industry peers.
RWT's Return On Invested Capital of 0.32% is in line compared to the rest of the industry. RWT outperforms 51.61% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.4% | ||
| ROE | -8.2% | ||
| ROIC | 0.32% |
ROA(3y)-0.38%
ROA(5y)-0.94%
ROE(3y)-4.33%
ROE(5y)-8.65%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
In the last couple of years the Profit Margin of RWT has declined.
RWT has a Operating Margin (8.37%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of RWT has declined.
With a Gross Margin value of 8.28%, RWT is not doing good in the industry: 80.65% of the companies in the same industry are doing better.
RWT's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.37% | ||
| PM (TTM) | N/A | ||
| GM | 8.28% |
OM growth 3Y-34.74%
OM growth 5Y-12.48%
PM growth 3Y-56.86%
PM growth 5Y-30.4%
GM growth 3Y-21.34%
GM growth 5Y-11.34%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), RWT is destroying value.
Compared to 1 year ago, RWT has more shares outstanding
The number of shares outstanding for RWT has been increased compared to 5 years ago.
RWT has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.07, we must say that RWT is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.07, RWT is in the better half of the industry, outperforming 66.13% of the companies in the same industry.
RWT has a Debt/Equity ratio of 18.73. This is a high value indicating a heavy dependency on external financing.
RWT's Debt to Equity ratio of 18.73 is on the low side compared to the rest of the industry. RWT is outperformed by 95.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 18.73 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.07 |
ROIC/WACC0.07
WACC4.62%
2.3 Liquidity
RWT has a Current Ratio of 0.26. This is a bad value and indicates that RWT is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.26, RWT is in line with its industry, outperforming 54.84% of the companies in the same industry.
RWT has a Quick Ratio of 0.26. This is a bad value and indicates that RWT is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.26, RWT perfoms like the industry average, outperforming 54.84% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.26 | ||
| Quick Ratio | 0.26 |
3. Growth
3.1 Past
The earnings per share for RWT have decreased strongly by -14.29% in the last year.
The earnings per share for RWT have been decreasing by -19.83% on average. This is quite bad
The Revenue has grown by 27.85% in the past year. This is a very strong growth!
The Revenue has been growing by 9.67% on average over the past years. This is quite good.
EPS 1Y (TTM)-14.29%
EPS 3Y-39.69%
EPS 5Y-19.83%
EPS Q2Q%-215.38%
Revenue 1Y (TTM)27.85%
Revenue growth 3Y19.75%
Revenue growth 5Y9.67%
Sales Q2Q%-45.45%
3.2 Future
Based on estimates for the next years, RWT will show a quite strong growth in Earnings Per Share. The EPS will grow by 18.65% on average per year.
The Revenue is expected to grow by 7.38% on average over the next years.
EPS Next Y29.36%
EPS Next 2Y30.89%
EPS Next 3Y18.65%
EPS Next 5YN/A
Revenue Next Year6.06%
Revenue Next 2Y15.51%
Revenue Next 3Y7.38%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 20.07 indicates a rather expensive valuation of RWT.
Compared to the rest of the industry, the Price/Earnings ratio of RWT is on the same level as its industry peers.
RWT is valuated rather cheaply when we compare the Price/Earnings ratio to 27.38, which is the current average of the S&P500 Index.
RWT is valuated cheaply with a Price/Forward Earnings ratio of 6.76.
RWT's Price/Forward Earnings ratio is rather cheap when compared to the industry. RWT is cheaper than 87.10% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.86. RWT is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.07 | ||
| Fwd PE | 6.76 |
4.2 Price Multiples
77.42% of the companies in the same industry are more expensive than RWT, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 178.22 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as RWT's earnings are expected to grow with 18.65% in the coming years.
PEG (NY)0.68
PEG (5Y)N/A
EPS Next 2Y30.89%
EPS Next 3Y18.65%
5. Dividend
5.1 Amount
RWT has a Yearly Dividend Yield of 9.48%, which is a nice return.
RWT's Dividend Yield is slightly below the industry average, which is at 11.50.
RWT's Dividend Yield is rather good when compared to the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.48% |
5.2 History
The dividend of RWT decreases each year by -10.27%.
RWT has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-10.27%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
The earnings of RWT are negative and hence is the payout ratio. RWT will probably not be able to sustain this dividend level.
DP-123.16%
EPS Next 2Y30.89%
EPS Next 3Y18.65%
6.02
-0.05 (-0.82%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners82.1%
Inst Owner Change0.58%
Ins Owners1.34%
Ins Owner Change3.43%
Market Cap777.90M
Analysts73.85
Price Target7.11 (18.11%)
Short Float %3.95%
Short Ratio4.94
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.48% |
Yearly Dividend0.76
Dividend Growth(5Y)-10.27%
DP-123.16%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-99.41%
Min EPS beat(2)-181.94%
Max EPS beat(2)-16.87%
EPS beat(4)1
Avg EPS beat(4)-48.66%
Min EPS beat(4)-181.94%
Max EPS beat(4)26.06%
EPS beat(8)1
Avg EPS beat(8)-39.74%
EPS beat(12)1
Avg EPS beat(12)-90.06%
EPS beat(16)3
Avg EPS beat(16)-70.65%
Revenue beat(2)0
Avg Revenue beat(2)-26.63%
Min Revenue beat(2)-50.87%
Max Revenue beat(2)-2.38%
Revenue beat(4)0
Avg Revenue beat(4)-18.1%
Min Revenue beat(4)-50.87%
Max Revenue beat(4)-2.38%
Revenue beat(8)1
Avg Revenue beat(8)-18.86%
Revenue beat(12)3
Avg Revenue beat(12)39.43%
Revenue beat(16)7
Avg Revenue beat(16)109.95%
PT rev (1m)0.91%
PT rev (3m)-5.51%
EPS NQ rev (1m)-9.87%
EPS NQ rev (3m)-13.98%
EPS NY rev (1m)-5.2%
EPS NY rev (3m)-6.03%
Revenue NQ rev (1m)-0.9%
Revenue NQ rev (3m)1.76%
Revenue NY rev (1m)-14.36%
Revenue NY rev (3m)-14.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.07 | ||
| Fwd PE | 6.76 | ||
| P/S | 0.71 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 0.74 | ||
| P/tB | 0.77 | ||
| EV/EBITDA | 178.22 |
EPS(TTM)0.3
EY4.98%
EPS(NY)0.89
Fwd EY14.8%
FCF(TTM)-54.23
FCFYN/A
OCF(TTM)-54.23
OCFYN/A
SpS8.48
BVpS8.15
TBVpS7.86
PEG (NY)0.68
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.4% | ||
| ROE | -8.2% | ||
| ROCE | 0.48% | ||
| ROIC | 0.32% | ||
| ROICexc | 0.33% | ||
| ROICexgc | 0.33% | ||
| OM | 8.37% | ||
| PM (TTM) | N/A | ||
| GM | 8.28% | ||
| FCFM | N/A |
ROA(3y)-0.38%
ROA(5y)-0.94%
ROE(3y)-4.33%
ROE(5y)-8.65%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y-27.55%
ROICexcg growth 5Y-4.26%
ROICexc growth 3Y-27.68%
ROICexc growth 5Y-4.1%
OM growth 3Y-34.74%
OM growth 5Y-12.48%
PM growth 3Y-56.86%
PM growth 5Y-30.4%
GM growth 3Y-21.34%
GM growth 5Y-11.34%
F-Score1
Asset Turnover0.05
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 18.73 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 191.84 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 0.1 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.26 | ||
| Quick Ratio | 0.26 | ||
| Altman-Z | 0.07 |
F-Score1
WACC4.62%
ROIC/WACC0.07
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-14.29%
EPS 3Y-39.69%
EPS 5Y-19.83%
EPS Q2Q%-215.38%
EPS Next Y29.36%
EPS Next 2Y30.89%
EPS Next 3Y18.65%
EPS Next 5YN/A
Revenue 1Y (TTM)27.85%
Revenue growth 3Y19.75%
Revenue growth 5Y9.67%
Sales Q2Q%-45.45%
Revenue Next Year6.06%
Revenue Next 2Y15.51%
Revenue Next 3Y7.38%
Revenue Next 5YN/A
EBIT growth 1Y26.43%
EBIT growth 3Y-21.85%
EBIT growth 5Y-4.01%
EBIT Next Year14.37%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-1967.75%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-1967.75%
OCF growth 3YN/A
OCF growth 5YN/A