REDWOOD TRUST INC (RWT) Stock Fundamental Analysis
USA - NYSE:RWT - US7580754023 - REIT
5.25 USD
+0.12 (+2.34%)
5.345 USD
+0.09 (+1.81%)
RWT gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 68 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. RWT may be in some trouble as it scores bad on both profitability and health. RWT is not overvalued while it is showing excellent growth. This is an interesting combination.
1. Profitability
1.1 Basic Checks
In the past year RWT was profitable.
RWT had a negative operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: RWT reported negative net income in multiple years.
RWT had a negative operating cash flow in each of the past 5 years.
1.2 Ratios
RWT has a worse Return On Assets (-0.40%) than 70.59% of its industry peers.
With a Return On Equity value of -8.20%, RWT is not doing good in the industry: 76.47% of the companies in the same industry are doing better.
With a Return On Invested Capital value of 0.32%, RWT perfoms like the industry average, outperforming 52.94% of the companies in the same industry.
| 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 of 8.37%. This is comparable to the rest of the industry: RWT outperforms 50.00% of its industry peers.
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: 83.82% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of RWT has declined.
| 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
RWT has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
RWT has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, RWT has more shares outstanding
Compared to 1 year ago, RWT has a worse debt to assets ratio.
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.
With a decent Altman-Z score value of 0.07, RWT is doing good in the industry, outperforming 70.59% of the companies in the same industry.
A Debt/Equity ratio of 18.73 is on the high side and indicates that RWT has dependencies on debt financing.
RWT has a Debt to Equity ratio of 18.73. This is amonst the worse of the industry: RWT underperforms 95.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 18.73 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.07 |
ROIC/WACC0.07
WACC4.55%
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.
RWT has a Current ratio of 0.26. This is in the better half of the industry: RWT outperforms 60.29% of its industry peers.
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.
RWT has a Quick ratio of 0.26. This is in the better half of the industry: RWT outperforms 60.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.26 | ||
| Quick Ratio | 0.26 |
3. Growth
3.1 Past
RWT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 47.73%, which is quite impressive.
The earnings per share for RWT have been decreasing by -19.83% on average. This is quite bad
Looking at the last year, RWT shows a very strong growth in Revenue. The Revenue has grown by 29.69%.
RWT shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.67% yearly.
EPS 1Y (TTM)47.73%
EPS 3Y-39.69%
EPS 5Y-19.83%
EPS Q2Q%11.11%
Revenue 1Y (TTM)29.69%
Revenue growth 3Y19.75%
Revenue growth 5Y9.67%
Sales Q2Q%-15.69%
3.2 Future
The Earnings Per Share is expected to grow by 22.00% on average over the next years. This is a very strong growth
RWT is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.39% yearly.
EPS Next Y29.49%
EPS Next 2Y26.8%
EPS Next 3Y22%
EPS Next 5YN/A
Revenue Next Year2.49%
Revenue Next 2Y15.52%
Revenue Next 3Y8.39%
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 stable.
4. Valuation
4.1 Price/Earnings Ratio
RWT is valuated reasonably with a Price/Earnings ratio of 8.08.
77.94% of the companies in the same industry are more expensive than RWT, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 26.03, RWT is valued rather cheaply.
A Price/Forward Earnings ratio of 6.28 indicates a rather cheap valuation of RWT.
RWT's Price/Forward Earnings ratio is rather cheap when compared to the industry. RWT is cheaper than 88.24% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.27. RWT is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.08 | ||
| Fwd PE | 6.28 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of RWT indicates a somewhat cheap valuation: RWT is cheaper than 69.12% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 177.19 |
4.3 Compensation for Growth
RWT's 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 22.00% in the coming years.
PEG (NY)0.27
PEG (5Y)N/A
EPS Next 2Y26.8%
EPS Next 3Y22%
5. Dividend
5.1 Amount
RWT has a Yearly Dividend Yield of 13.71%, which is a nice return.
RWT's Dividend Yield is comparable with the industry average which is at 13.23.
Compared to an average S&P500 Dividend Yield of 2.38, RWT pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 13.71% |
5.2 History
The dividend of RWT decreases each year by -10.27%.
RWT has paid a dividend for at least 10 years, which is 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 2Y26.8%
EPS Next 3Y22%
5.25
+0.12 (+2.34%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners80.89%
Inst Owner Change-1.65%
Ins Owners1.36%
Ins Owner Change1.12%
Market Cap678.40M
Revenue(TTM)987.30M
Net Income(TTM)-86340000
Analysts73.85
Price Target7.11 (35.43%)
Short Float %3.82%
Short Ratio5.29
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 13.71% |
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)-9.27%
Min EPS beat(2)-16.87%
Max EPS beat(2)-1.67%
EPS beat(4)1
Avg EPS beat(4)-3.59%
Min EPS beat(4)-21.87%
Max EPS beat(4)26.06%
EPS beat(8)1
Avg EPS beat(8)-17.2%
EPS beat(12)1
Avg EPS beat(12)-75.03%
EPS beat(16)3
Avg EPS beat(16)-59.39%
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%
PT rev (3m)-4.7%
EPS NQ rev (1m)2.05%
EPS NQ rev (3m)-11.16%
EPS NY rev (1m)9.39%
EPS NY rev (3m)-6.05%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.71%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-14.36%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.08 | ||
| Fwd PE | 6.28 | ||
| P/S | 0.62 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 0.64 | ||
| P/tB | 0.67 | ||
| EV/EBITDA | 177.19 |
EPS(TTM)0.65
EY12.38%
EPS(NY)0.84
Fwd EY15.92%
FCF(TTM)-54.23
FCFYN/A
OCF(TTM)-54.23
OCFYN/A
SpS8.48
BVpS8.15
TBVpS7.86
PEG (NY)0.27
PEG (5Y)N/A
Graham Number10.92
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
ROICexgc growth 3Y-27.55%
ROICexgc 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
WACC4.55%
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)47.73%
EPS 3Y-39.69%
EPS 5Y-19.83%
EPS Q2Q%11.11%
EPS Next Y29.49%
EPS Next 2Y26.8%
EPS Next 3Y22%
EPS Next 5YN/A
Revenue 1Y (TTM)29.69%
Revenue growth 3Y19.75%
Revenue growth 5Y9.67%
Sales Q2Q%-15.69%
Revenue Next Year2.49%
Revenue Next 2Y15.52%
Revenue Next 3Y8.39%
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
REDWOOD TRUST INC / RWT FAQ
What is the ChartMill fundamental rating of REDWOOD TRUST INC (RWT) stock?
ChartMill assigns a fundamental rating of 3 / 10 to RWT.
What is the valuation status for RWT stock?
ChartMill assigns a valuation rating of 6 / 10 to REDWOOD TRUST INC (RWT). This can be considered as Fairly Valued.
What is the profitability of RWT stock?
REDWOOD TRUST INC (RWT) has a profitability rating of 1 / 10.
What is the expected EPS growth for REDWOOD TRUST INC (RWT) stock?
The Earnings per Share (EPS) of REDWOOD TRUST INC (RWT) is expected to grow by 29.49% in the next year.
How sustainable is the dividend of REDWOOD TRUST INC (RWT) stock?
The dividend rating of REDWOOD TRUST INC (RWT) is 5 / 10 and the dividend payout ratio is -123.16%.