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REDWOOD TRUST INC (RWT) Stock Fundamental Analysis

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

5.62  +0.01 (+0.18%)

After market: 5.7 +0.08 (+1.42%)

Fundamental Rating

4

Overall RWT gets a fundamental rating of 4 out of 10. We evaluated RWT against 65 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. Both the profitability and financial health of RWT have multiple concerns. RWT is not priced too expensively while it is growing strongly. Keep and eye on this one!


Dividend Valuation Growth Profitability Health

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2

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.
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 2024 0 -2B -4B

1.2 Ratios

RWT's Return On Assets of 0.14% is on the low side compared to the rest of the industry. RWT is outperformed by 60.00% of its industry peers.
The Return On Equity of RWT (2.38%) is comparable to the rest of the industry.
RWT has a Return On Invested Capital (0.45%) which is in line with its industry peers.
Industry RankSector Rank
ROA 0.14%
ROE 2.38%
ROIC 0.45%
ROA(3y)-0.38%
ROA(5y)-0.94%
ROE(3y)-4.33%
ROE(5y)-8.65%
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 2024 0 20 -20 -40

1.3 Margins

RWT has a Profit Margin (2.65%) which is comparable to the rest of the industry.
RWT's Profit Margin has declined in the last couple of years.
RWT has a Operating Margin of 11.23%. This is comparable to the rest of the industry: RWT outperforms 55.38% of its industry peers.
In the last couple of years the Operating Margin of RWT has declined.
The Gross Margin of RWT (12.41%) is worse than 70.77% of its industry peers.
In the last couple of years the Gross Margin of RWT has declined.
Industry RankSector Rank
OM 11.23%
PM (TTM) 2.65%
GM 12.41%
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%
RWT Yearly Profit, Operating, Gross MarginsRWT Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 50 -50 -100

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1

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), RWT is destroying value.
RWT has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, RWT has more shares outstanding
The debt/assets ratio for RWT is higher compared to a year ago.
RWT Yearly Shares OutstandingRWT Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 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 2024 5B 10B 15B

2.2 Solvency

RWT has an Altman-Z score of 0.08. This is a bad value and indicates that RWT is not financially healthy and even has some risk of bankruptcy.
RWT has a better Altman-Z score (0.08) than 67.69% of its industry peers.
A Debt/Equity ratio of 15.39 is on the high side and indicates that RWT has dependencies on debt financing.
With a Debt to Equity ratio value of 15.39, RWT is not doing good in the industry: 95.38% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 15.39
Debt/FCF N/A
Altman-Z 0.08
ROIC/WACC0.1
WACC4.61%
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 2024 0 5B -5B 10B 15B

2.3 Liquidity

A Current Ratio of 0.21 indicates that RWT may have some problems paying its short term obligations.
The Current ratio of RWT (0.21) is comparable to the rest of the industry.
RWT has a Quick Ratio of 0.21. 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's Quick ratio of 0.21 is in line compared to the rest of the industry. RWT outperforms 58.46% of its industry peers.
Industry RankSector Rank
Current Ratio 0.21
Quick Ratio 0.21
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 2024 500M 1B 1.5B 2B

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7

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 163.64% over the past year.
Measured over the past years, RWT shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -19.83% on average per year.
RWT shows a strong growth in Revenue. In the last year, the Revenue has grown by 33.51%.
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)163.64%
EPS 3Y-39.69%
EPS 5Y-19.83%
EPS Q2Q%75%
Revenue 1Y (TTM)33.51%
Revenue growth 3Y19.75%
Revenue growth 5Y9.67%
Sales Q2Q%16.25%

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 15.34% on average per year.
RWT is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.46% yearly.
EPS Next Y37.66%
EPS Next 2Y30.74%
EPS Next 3Y15.34%
EPS Next 5YN/A
Revenue Next Year23.43%
Revenue Next 2Y12.99%
Revenue Next 3Y9.46%
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.
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 800M
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

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6

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 9.69, the valuation of RWT can be described as reasonable.
70.77% 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 26.35, RWT is valued rather cheaply.
The Price/Forward Earnings ratio is 6.32, which indicates a rather cheap valuation of RWT.
90.77% of the companies in the same industry are more expensive than RWT, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.19, RWT is valued rather cheaply.
Industry RankSector Rank
PE 9.69
Fwd PE 6.32
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 the industry average as 76.92% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 129.28
RWT Per share dataRWT EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 -20 -40

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 15.34% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.26
PEG (5Y)N/A
EPS Next 2Y30.74%
EPS Next 3Y15.34%

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4

5. Dividend

5.1 Amount

RWT has a Yearly Dividend Yield of 11.86%, which is a nice return.
RWT's Dividend Yield is comparable with the industry average which is at 12.22.
Compared to an average S&P500 Dividend Yield of 2.40, RWT pays a better dividend.
Industry RankSector Rank
Dividend Yield 11.86%

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
RWT Yearly Dividends per shareRWT Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.2 0.4 0.6 0.8 1

5.3 Sustainability

366.90% of the earnings are spent on dividend by RWT. This is not a sustainable payout ratio.
DP366.9%
EPS Next 2Y30.74%
EPS Next 3Y15.34%
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 2024 0 -2B -4B
RWT Dividend Payout.RWT Dividend Payout, showing the Payout Ratio.RWT Dividend Payout.PayoutRetained Earnings

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REDWOOD TRUST INC

NYSE:RWT (6/20/2025, 8:04:00 PM)

After market: 5.7 +0.08 (+1.42%)

5.62

+0.01 (+0.18%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)04-30 2025-04-30/amc
Earnings (Next)07-30 2025-07-30/amc
Inst Owners75.58%
Inst Owner Change-0.78%
Ins Owners1.32%
Ins Owner Change5.23%
Market Cap748.13M
Analysts75.38
Price Target7.52 (33.81%)
Short Float %3.09%
Short Ratio3.84
Dividend
Industry RankSector Rank
Dividend Yield 11.86%
Yearly Dividend0.76
Dividend Growth(5Y)-10.27%
DP366.9%
Div Incr Years0
Div Non Decr Years0
Ex-Date03-24 2025-03-24 (0.18)
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-19.37%
Min EPS beat(2)-21.87%
Max EPS beat(2)-16.87%
EPS beat(4)1
Avg EPS beat(4)-3.9%
Min EPS beat(4)-21.87%
Max EPS beat(4)26.06%
EPS beat(8)1
Avg EPS beat(8)-29.49%
EPS beat(12)1
Avg EPS beat(12)-88.33%
EPS beat(16)4
Avg EPS beat(16)-56.27%
Revenue beat(2)0
Avg Revenue beat(2)-3.56%
Min Revenue beat(2)-4.75%
Max Revenue beat(2)-2.38%
Revenue beat(4)0
Avg Revenue beat(4)-9.19%
Min Revenue beat(4)-15.25%
Max Revenue beat(4)-2.38%
Revenue beat(8)1
Avg Revenue beat(8)-14.45%
Revenue beat(12)4
Avg Revenue beat(12)66.19%
Revenue beat(16)8
Avg Revenue beat(16)168.39%
PT rev (1m)-0.84%
PT rev (3m)-8.13%
EPS NQ rev (1m)1.43%
EPS NQ rev (3m)-2.47%
EPS NY rev (1m)0%
EPS NY rev (3m)-8.36%
Revenue NQ rev (1m)3.7%
Revenue NQ rev (3m)-4.11%
Revenue NY rev (1m)-0.78%
Revenue NY rev (3m)7.88%
Valuation
Industry RankSector Rank
PE 9.69
Fwd PE 6.32
P/S 0.7
P/FCF N/A
P/OCF N/A
P/B 0.63
P/tB 0.65
EV/EBITDA 129.28
EPS(TTM)0.58
EY10.32%
EPS(NY)0.89
Fwd EY15.81%
FCF(TTM)-51.54
FCFYN/A
OCF(TTM)-51.54
OCFYN/A
SpS7.98
BVpS8.89
TBVpS8.59
PEG (NY)0.26
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 0.14%
ROE 2.38%
ROCE 0.67%
ROIC 0.45%
ROICexc 0.46%
ROICexgc 0.46%
OM 11.23%
PM (TTM) 2.65%
GM 12.41%
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-Score3
Asset Turnover0.05
Health
Industry RankSector Rank
Debt/Equity 15.39
Debt/FCF N/A
Debt/EBITDA 139.66
Cap/Depr N/A
Cap/Sales N/A
Interest Coverage 0.14
Cash Conversion N/A
Profit Quality N/A
Current Ratio 0.21
Quick Ratio 0.21
Altman-Z 0.08
F-Score3
WACC4.61%
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)163.64%
EPS 3Y-39.69%
EPS 5Y-19.83%
EPS Q2Q%75%
EPS Next Y37.66%
EPS Next 2Y30.74%
EPS Next 3Y15.34%
EPS Next 5YN/A
Revenue 1Y (TTM)33.51%
Revenue growth 3Y19.75%
Revenue growth 5Y9.67%
Sales Q2Q%16.25%
Revenue Next Year23.43%
Revenue Next 2Y12.99%
Revenue Next 3Y9.46%
Revenue Next 5YN/A
EBIT growth 1Y103.86%
EBIT growth 3Y-21.85%
EBIT growth 5Y-4.01%
EBIT Next Year-2.46%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-2795.34%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-2795.34%
OCF growth 3YN/A
OCF growth 5YN/A