REDWOOD TRUST INC (RWT) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:RWT - US7580754023 - REIT
5.54 USD
-0.04 (-0.72%)
5.54 USD
0 (0%)
Overall RWT gets a fundamental rating of 3 out of 10. We evaluated RWT against 69 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. Both the profitability and financial health of RWT have multiple concerns. RWT is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one!
1. Profitability
1.1 Basic Checks
RWT had positive earnings in the past year.
In the past year RWT has reported a negative cash flow from operations.
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 (-0.48%) than 72.46% of its industry peers.
RWT has a worse Return On Equity (-10.92%) than 75.36% of its industry peers.
RWT's Return On Invested Capital of 0.22% is on the low side compared to the rest of the industry. RWT is outperformed by 72.46% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.48% | ||
| ROE | -10.92% | ||
| ROIC | 0.22% |
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
RWT's Profit Margin has declined in the last couple of years.
The Operating Margin of RWT (5.73%) is worse than 71.01% of its industry peers.
In the last couple of years the Operating Margin of RWT has declined.
With a Gross Margin value of 6.58%, RWT is not doing good in the industry: 86.96% 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 | 5.73% | ||
| PM (TTM) | N/A | ||
| GM | 6.58% |
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.
The number of shares outstanding for RWT has been increased compared to 1 year ago.
Compared to 5 years ago, RWT has more shares outstanding
RWT has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.02, we must say that RWT is in the distress zone and has some risk of bankruptcy.
With a decent Altman-Z score value of 0.02, RWT is doing good in the industry, outperforming 60.87% of the companies in the same industry.
A Debt/Equity ratio of 21.20 is on the high side and indicates that RWT has dependencies on debt financing.
RWT has a Debt to Equity ratio of 21.20. This is amonst the worse of the industry: RWT underperforms 95.65% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 21.2 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.02 |
ROIC/WACC0.05
WACC4.56%
2.3 Liquidity
RWT has a Current Ratio of 0.17. 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 (0.17) which is in line with its industry peers.
A Quick Ratio of 0.17 indicates that RWT may have some problems paying its short term obligations.
RWT has a Quick ratio (0.17) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.17 | ||
| Quick Ratio | 0.17 |
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.
RWT shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -19.83% yearly.
Looking at the last year, RWT shows a very strong growth in Revenue. The Revenue has grown by 21.58%.
Measured over the past years, RWT shows a quite strong growth in Revenue. The Revenue has been growing by 9.67% on average per year.
EPS 1Y (TTM)47.73%
EPS 3Y-39.69%
EPS 5Y-19.83%
EPS Q2Q%11.11%
Revenue 1Y (TTM)21.58%
Revenue growth 3Y19.75%
Revenue growth 5Y9.67%
Sales Q2Q%-41.18%
3.2 Future
RWT is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 22.00% yearly.
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
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
Based on the Price/Earnings ratio of 8.52, the valuation of RWT can be described as reasonable.
Based on the Price/Earnings ratio, RWT is valued a bit cheaper than the industry average as 75.36% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 26.15. RWT is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 6.63 indicates a rather cheap valuation of RWT.
Compared to the rest of the industry, the Price/Forward Earnings ratio of RWT indicates a rather cheap valuation: RWT is cheaper than 84.06% 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 (36.22), we can say RWT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.52 | ||
| Fwd PE | 6.63 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RWT is valued a bit cheaper than 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 250.54 |
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.
RWT's earnings are expected to grow with 22.00% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.29
PEG (5Y)N/A
EPS Next 2Y26.8%
EPS Next 3Y22%
5. Dividend
5.1 Amount
RWT has a Yearly Dividend Yield of 13.16%, which is a nice return.
Compared to an average industry Dividend Yield of 13.00, RWT has a dividend in line with its industry peers.
RWT's Dividend Yield is rather good when compared to the S&P500 average which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 13.16% |
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-98.1%
EPS Next 2Y26.8%
EPS Next 3Y22%
5.54
-0.04 (-0.72%)
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-5.8%
Ins Owners1.36%
Ins Owner Change0%
Market Cap701.81M
Revenue(TTM)1.14B
Net Income(TTM)-109.14M
Analysts73.85
Price Target6.91 (24.73%)
Short Float %4.88%
Short Ratio5.73
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 13.16% |
Yearly Dividend0.76
Dividend Growth(5Y)-10.27%
DP-98.1%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)6.27%
Min EPS beat(2)-1.67%
Max EPS beat(2)14.21%
EPS beat(4)1
Avg EPS beat(4)-6.55%
Min EPS beat(4)-21.87%
Max EPS beat(4)14.21%
EPS beat(8)2
Avg EPS beat(8)-10.05%
EPS beat(12)2
Avg EPS beat(12)-33.19%
EPS beat(16)3
Avg EPS beat(16)-62.63%
Revenue beat(2)0
Avg Revenue beat(2)-51.42%
Min Revenue beat(2)-51.98%
Max Revenue beat(2)-50.87%
Revenue beat(4)0
Avg Revenue beat(4)-27.49%
Min Revenue beat(4)-51.98%
Max Revenue beat(4)-2.38%
Revenue beat(8)1
Avg Revenue beat(8)-20.49%
Revenue beat(12)2
Avg Revenue beat(12)7.68%
Revenue beat(16)6
Avg Revenue beat(16)81.58%
PT rev (1m)-2.74%
PT rev (3m)-1.86%
EPS NQ rev (1m)-12.3%
EPS NQ rev (3m)-12.3%
EPS NY rev (1m)1.01%
EPS NY rev (3m)0.1%
Revenue NQ rev (1m)1.58%
Revenue NQ rev (3m)0.1%
Revenue NY rev (1m)-3.37%
Revenue NY rev (3m)-6.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.52 | ||
| Fwd PE | 6.63 | ||
| P/S | 0.61 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 0.7 | ||
| P/tB | 0.73 | ||
| EV/EBITDA | 250.54 |
EPS(TTM)0.65
EY11.73%
EPS(NY)0.84
Fwd EY15.09%
FCF(TTM)-59.9
FCFYN/A
OCF(TTM)-59.9
OCFYN/A
SpS9.02
BVpS7.89
TBVpS7.6
PEG (NY)0.29
PEG (5Y)N/A
Graham Number10.74
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.48% | ||
| ROE | -10.92% | ||
| ROCE | 0.33% | ||
| ROIC | 0.22% | ||
| ROICexc | 0.22% | ||
| ROICexgc | 0.22% | ||
| OM | 5.73% | ||
| PM (TTM) | N/A | ||
| GM | 6.58% | ||
| 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 | 21.2 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 278.7 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 0.08 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.17 | ||
| Quick Ratio | 0.17 | ||
| Altman-Z | 0.02 |
F-Score1
WACC4.56%
ROIC/WACC0.05
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)21.58%
Revenue growth 3Y19.75%
Revenue growth 5Y9.67%
Sales Q2Q%-41.18%
Revenue Next Year2.49%
Revenue Next 2Y15.52%
Revenue Next 3Y8.39%
Revenue Next 5YN/A
EBIT growth 1Y-37.56%
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-765.04%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-765.04%
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 4 / 10 and the dividend payout ratio is -98.1%.