Logo image of RWT

REDWOOD TRUST INC (RWT) Stock Fundamental Analysis

NYSE:RWT - New York Stock Exchange, Inc. - US7580754023 - REIT - Currency: USD

6.54  +0.06 (+0.93%)

After market: 6.54 0 (0%)

Fundamental Rating

3

Overall RWT gets a fundamental rating of 3 out of 10. We evaluated RWT against 64 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.


Dividend Valuation Growth Profitability Health

Quickly go to:

2

1. Profitability

1.1 Basic Checks

In the past year RWT was profitable.
In the past year RWT has reported a negative cash flow from operations.
In the past 5 years RWT reported 4 times negative net income.
RWT had a negative operating cash flow in each of the past 5 years.
RWT Yearly Net Income VS EBIT VS OCF VS FCFRWT Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 -2B -4B

1.2 Ratios

With a Return On Assets value of 0.38%, RWT perfoms like the industry average, outperforming 45.31% of the companies in the same industry.
RWT has a better Return On Equity (5.77%) than 64.06% of its industry peers.
The Return On Invested Capital of RWT (0.46%) is comparable to the rest of the industry.
Industry RankSector Rank
ROA 0.38%
ROE 5.77%
ROIC 0.46%
ROA(3y)0.24%
ROA(5y)-0.8%
ROE(3y)1.91%
ROE(5y)-7.56%
ROIC(3y)N/A
ROIC(5y)N/A
RWT Yearly ROA, ROE, ROICRWT Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 20 -20 -40

1.3 Margins

Looking at the Profit Margin, with a value of 7.51%, RWT is in line with its industry, outperforming 43.75% of the companies in the same industry.
RWT has a Operating Margin (11.36%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of RWT has declined.
RWT's Gross Margin of 15.66% is on the low side compared to the rest of the industry. RWT is outperformed by 73.44% of its industry peers.
In the last couple of years the Gross Margin of RWT has declined.
Industry RankSector Rank
OM 11.36%
PM (TTM) 7.51%
GM 15.66%
OM growth 3Y-19.56%
OM growth 5Y-28.2%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-11.28%
GM growth 5Y-16.33%
RWT Yearly Profit, Operating, Gross MarginsRWT Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 50 -50 -100

More info and screens

1

2. Health

2.1 Basic Checks

RWT has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
There is no outstanding debt for RWT. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
RWT Yearly Shares OutstandingRWT Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 20M 40M 60M 80M 100M
RWT Yearly Total Debt VS Total AssetsRWT Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 5B 10B 15B

2.2 Solvency

RWT has an Altman-Z score of 0.07. This is a bad value and indicates that RWT is not financially healthy and even has some risk of bankruptcy.
With a decent Altman-Z score value of 0.07, RWT is doing good in the industry, outperforming 67.19% of the companies in the same industry.
A Debt/Equity ratio of 13.75 is on the high side and indicates that RWT has dependencies on debt financing.
With a Debt to Equity ratio value of 13.75, RWT is not doing good in the industry: 95.31% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 13.75
Debt/FCF N/A
Altman-Z 0.07
ROIC/WACC0.1
WACC4.64%
RWT Yearly LT Debt VS Equity VS FCFRWT Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 5B -5B 10B

2.3 Liquidity

RWT has a Current Ratio of 0.20. This is a bad value and indicates that RWT is not financially healthy enough and could expect problems in meeting its short term obligations.
RWT has a Current ratio of 0.20. This is comparable to the rest of the industry: RWT outperforms 54.69% of its industry peers.
RWT has a Quick Ratio of 0.20. 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 Quick ratio, with a value of 0.20, RWT is in line with its industry, outperforming 54.69% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 0.2
Quick Ratio 0.2
RWT Yearly Current Assets VS Current LiabilitesRWT Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B

More info and screens

4

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 225.00% over the past year.
RWT shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -19.83% yearly.
EPS 1Y (TTM)225%
EPS 3Y-39.69%
EPS 5Y-19.83%
EPS Q2Q%160%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%38%

3.2 Future

The Earnings Per Share is expected to grow by 18.19% on average over the next years. This is quite good.
Based on estimates for the next years, RWT will show a quite strong growth in Revenue. The Revenue will grow by 11.53% on average per year.
EPS Next Y50.21%
EPS Next 2Y30.57%
EPS Next 3Y18.19%
EPS Next 5YN/A
Revenue Next Year14.42%
Revenue Next 2Y13.32%
Revenue Next 3Y11.53%
Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
RWT Yearly Revenue VS EstimatesRWT Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 200M 400M 600M
RWT Yearly EPS VS EstimatesRWT Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 0 2 -2 -4

More info and screens

5

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 12.58, RWT is valued correctly.
Based on the Price/Earnings ratio, RWT is valued a bit cheaper than the industry average as 62.50% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 29.35. RWT is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 8.37, the valuation of RWT can be described as very reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of RWT indicates a somewhat cheap valuation: RWT is cheaper than 67.19% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of RWT to the average of the S&P500 Index (22.10), we can say RWT is valued rather cheaply.
Industry RankSector Rank
PE 12.58
Fwd PE 8.37
RWT Price Earnings VS Forward Price EarningsRWT Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, RWT is valued a bit cheaper than 79.69% of the companies in the same industry.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 128.62
RWT Per share dataRWT EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 -10 -20 -30 -40

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.
RWT's earnings are expected to grow with 18.19% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.25
PEG (5Y)N/A
EPS Next 2Y30.57%
EPS Next 3Y18.19%

More info and screens

4

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 10.34%, RWT is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 12.68, RWT is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.33, RWT pays a better dividend.
Industry RankSector Rank
Dividend Yield 10.34%

5.2 History

The dividend of RWT decreases each year by -8.56%.
RWT has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-8.56%
Div Incr Years0
Div Non Decr Years0
RWT Yearly Dividends per shareRWT Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0.2 0.4 0.6 0.8 1

5.3 Sustainability

137.02% of the earnings are spent on dividend by RWT. This is not a sustainable payout ratio.
DP137.02%
EPS Next 2Y30.57%
EPS Next 3Y18.19%
RWT Yearly Income VS Free CF VS DividendRWT Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 -2B -4B
RWT Dividend Payout.RWT Dividend Payout, showing the Payout Ratio.RWT Dividend Payout.PayoutRetained Earnings

More info and screens

REDWOOD TRUST INC

NYSE:RWT (3/7/2025, 8:04:00 PM)

After market: 6.54 0 (0%)

6.54

+0.06 (+0.93%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)02-13 2025-02-13/amc
Earnings (Next)07-30 2025-07-30/amc
Inst Owners79.96%
Inst Owner Change0.39%
Ins Owners1.17%
Ins Owner Change1.8%
Market Cap868.90M
Analysts77.14
Price Target8.19 (25.23%)
Short Float %2.97%
Short Ratio3.81
Dividend
Industry RankSector Rank
Dividend Yield 10.34%
Yearly Dividend0.76
Dividend Growth(5Y)-8.56%
DP137.02%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)11.58%
Min EPS beat(2)-2.9%
Max EPS beat(2)26.06%
EPS beat(4)1
Avg EPS beat(4)-13.54%
Min EPS beat(4)-63.54%
Max EPS beat(4)26.06%
EPS beat(8)1
Avg EPS beat(8)-46.51%
EPS beat(12)2
Avg EPS beat(12)-81.33%
EPS beat(16)6
Avg EPS beat(16)-45.5%
Revenue beat(2)0
Avg Revenue beat(2)-14.82%
Min Revenue beat(2)-15.25%
Max Revenue beat(2)-14.39%
Revenue beat(4)1
Avg Revenue beat(4)-13.48%
Min Revenue beat(4)-27.22%
Max Revenue beat(4)2.94%
Revenue beat(8)2
Avg Revenue beat(8)25.27%
Revenue beat(12)6
Avg Revenue beat(12)117.94%
Revenue beat(16)10
Avg Revenue beat(16)214.23%
PT rev (1m)-2.69%
PT rev (3m)-4.71%
EPS NQ rev (1m)-2.23%
EPS NQ rev (3m)-5.32%
EPS NY rev (1m)0%
EPS NY rev (3m)0.29%
Revenue NQ rev (1m)-4.54%
Revenue NQ rev (3m)-7.05%
Revenue NY rev (1m)-1.3%
Revenue NY rev (3m)-2.05%
Valuation
Industry RankSector Rank
PE 12.58
Fwd PE 8.37
P/S 0.92
P/FCF N/A
P/OCF N/A
P/B 0.71
P/tB 0.74
EV/EBITDA 128.62
EPS(TTM)0.52
EY7.95%
EPS(NY)0.78
Fwd EY11.94%
FCF(TTM)-46.34
FCFYN/A
OCF(TTM)-46.34
OCFYN/A
SpS7.07
BVpS9.21
TBVpS8.87
PEG (NY)0.25
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 0.38%
ROE 5.77%
ROCE 0.66%
ROIC 0.46%
ROICexc 0.47%
ROICexgc 0.48%
OM 11.36%
PM (TTM) 7.51%
GM 15.66%
FCFM N/A
ROA(3y)0.24%
ROA(5y)-0.8%
ROE(3y)1.91%
ROE(5y)-7.56%
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-21.57%
ROICexcg growth 5Y-20.45%
ROICexc growth 3Y-21.55%
ROICexc growth 5Y-20.4%
OM growth 3Y-19.56%
OM growth 5Y-28.2%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-11.28%
GM growth 5Y-16.33%
F-Score4
Asset Turnover0.05
Health
Industry RankSector Rank
Debt/Equity 13.75
Debt/FCF N/A
Debt/EBITDA 140.54
Cap/Depr N/A
Cap/Sales N/A
Interest Coverage 0.12
Cash Conversion N/A
Profit Quality N/A
Current Ratio 0.2
Quick Ratio 0.2
Altman-Z 0.07
F-Score4
WACC4.64%
ROIC/WACC0.1
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)225%
EPS 3Y-39.69%
EPS 5Y-19.83%
EPS Q2Q%160%
EPS Next Y50.21%
EPS Next 2Y30.57%
EPS Next 3Y18.19%
EPS Next 5YN/A
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%38%
Revenue Next Year14.42%
Revenue Next 2Y13.32%
Revenue Next 3Y11.53%
Revenue Next 5YN/A
EBIT growth 1Y982.79%
EBIT growth 3Y-11.52%
EBIT growth 5Y-17.44%
EBIT Next Year53.15%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-201.26%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-201.26%
OCF growth 3YN/A
OCF growth 5YN/A