REDWOOD TRUST INC (RWT) Stock Fundamental Analysis
NYSE:RWT - US7580754023 - REIT
6.12 USD
+0.1 (+1.66%)
6.0437 USD
-0.08 (-1.25%)
Taking everything into account, RWT scores 3 out of 10 in our fundamental rating. RWT was compared to 67 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. RWT has a bad profitability rating. Also its financial health evaluation is rather negative. RWT is not valued too expensively and it also shows a decent 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.
The reported net income has been mixed in the past 5 years: RWT reported negative net income in multiple years.
In the past 5 years RWT always reported negative operating cash flow.
1.2 Ratios
RWT's Return On Assets of -0.40% is on the low side compared to the rest of the industry. RWT is outperformed by 68.66% of its industry peers.
RWT's Return On Equity of -8.20% is on the low side compared to the rest of the industry. RWT is outperformed by 74.63% of its industry peers.
Looking at the Return On Invested Capital, with a value of 0.32%, RWT is in line with its industry, outperforming 55.22% 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
RWT's Profit Margin has declined in the last couple of years.
RWT has a Operating Margin of 8.37%. This is comparable to the rest of the industry: RWT outperforms 52.24% of its industry peers.
RWT's Operating Margin has declined in the last couple of years.
With a Gross Margin value of 8.28%, RWT is not doing good in the industry: 82.09% 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so RWT is destroying value.
Compared to 1 year ago, RWT has more shares outstanding
RWT has more shares outstanding than it did 5 years ago.
RWT has a worse debt/assets ratio than last year.
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.
RWT has a better Altman-Z score (0.07) than 68.66% of its industry peers.
A Debt/Equity ratio of 18.73 is on the high side and indicates that RWT has dependencies on debt 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 95.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 18.73 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.07 |
ROIC/WACC0.07
WACC4.63%
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 (0.26) which is in line with 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.
With a Quick ratio value of 0.26, RWT perfoms like the industry average, outperforming 58.21% 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.
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 27.85%.
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
RWT is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 18.65% yearly.
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 Y29.36%
EPS Next 2Y30.89%
EPS Next 3Y18.65%
EPS Next 5YN/A
Revenue Next Year9.43%
Revenue Next 2Y17.84%
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.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 20.40, which indicates a rather expensive current valuation of RWT.
The rest of the industry has a similar Price/Earnings ratio as RWT.
Compared to an average S&P500 Price/Earnings ratio of 27.08, RWT is valued a bit cheaper.
RWT is valuated cheaply with a Price/Forward Earnings ratio of 6.87.
Based on the Price/Forward Earnings ratio, RWT is valued cheaply inside the industry as 89.55% of the companies are valued more expensively.
RWT is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.72, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.4 | ||
| Fwd PE | 6.87 |
4.2 Price Multiples
RWT's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. RWT is cheaper than 71.64% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 178.16 |
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)0.69
PEG (5Y)N/A
EPS Next 2Y30.89%
EPS Next 3Y18.65%
5. Dividend
5.1 Amount
RWT has a Yearly Dividend Yield of 12.10%, which is a nice return.
RWT's Dividend Yield is comparable with the industry average which is at 12.25.
RWT's Dividend Yield is rather good when compared to the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 12.1% |
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 2Y30.89%
EPS Next 3Y18.65%
6.12
+0.1 (+1.66%)
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 Cap790.83M
Analysts73.85
Price Target7.04 (15.03%)
Short Float %3.69%
Short Ratio4.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 12.1% |
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)-5.56%
PT rev (3m)-7.14%
EPS NQ rev (1m)-3.87%
EPS NQ rev (3m)-6.73%
EPS NY rev (1m)-5.2%
EPS NY rev (3m)-6.03%
Revenue NQ rev (1m)2.01%
Revenue NQ rev (3m)4.78%
Revenue NY rev (1m)-11.34%
Revenue NY rev (3m)-12.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.4 | ||
| Fwd PE | 6.87 | ||
| P/S | 0.72 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 0.75 | ||
| P/tB | 0.78 | ||
| EV/EBITDA | 178.16 |
EPS(TTM)0.3
EY4.9%
EPS(NY)0.89
Fwd EY14.56%
FCF(TTM)-54.23
FCFYN/A
OCF(TTM)-54.23
OCFYN/A
SpS8.48
BVpS8.15
TBVpS7.86
PEG (NY)0.69
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
WACC4.63%
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 Year9.43%
Revenue Next 2Y17.84%
Revenue Next 3Y9.46%
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