REDWOOD TRUST INC (RWT) Stock Fundamental Analysis
USA - NYSE:RWT - US7580754023 - REIT
5.2 USD
-0.04 (-0.76%)
5.2 USD
0 (0%)
Taking everything into account, RWT scores 3 out of 10 in our fundamental rating. RWT was compared to 68 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 overvalued while it is showing excellent growth. This is an interesting combination.
1. Profitability
1.1 Basic Checks
RWT had positive earnings in the past year.
RWT had a negative operating cash flow in the past year.
In multiple years RWT reported negative net income over the last 5 years.
RWT had a negative operating cash flow in each of the past 5 years.
1.2 Ratios
RWT has a Return On Assets of -0.40%. This is in the lower half of the industry: RWT underperforms 70.59% 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 76.47% of its industry peers.
RWT has a Return On Invested Capital (0.32%) which is in line with its industry peers.
| 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 (8.37%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of RWT has declined.
Looking at the Gross Margin, with a value of 8.28%, RWT is doing worse than 86.76% of the companies in the same industry.
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
RWT has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, RWT has more shares outstanding
RWT has more shares outstanding than it did 5 years ago.
The debt/assets ratio for RWT is higher compared to a year ago.
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 70.59% of the companies in the same industry.
RWT has a Debt/Equity ratio of 18.73. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 18.73, RWT is not doing good in the industry: 95.59% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 18.73 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.07 |
ROIC/WACC0.07
WACC4.54%
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 better Current ratio (0.26) than 60.29% of its industry peers.
A Quick Ratio of 0.26 indicates that RWT may have some problems paying its short term obligations.
With a decent Quick ratio value of 0.26, RWT is doing good in the industry, outperforming 60.29% 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 has grown by an impressive 47.73% 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 29.69%.
The Revenue has been growing by 9.67% on average over the past years. This is quite good.
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%-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.
Based on estimates for the next years, RWT will show a quite strong growth in Revenue. The Revenue will grow by 8.39% on average per year.
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.
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
Based on the Price/Earnings ratio of 8.00, the valuation of RWT can be described as reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of RWT indicates a somewhat cheap valuation: RWT is cheaper than 77.94% of the companies listed in the same industry.
RWT's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.91.
The Price/Forward Earnings ratio is 6.22, which 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 89.71% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 34.57, RWT is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8 | ||
| Fwd PE | 6.22 |
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 | 177.18 |
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 14.06%, which is a nice return.
Compared to an average industry Dividend Yield of 13.23, RWT has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.36, RWT pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 14.06% |
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
RWT has negative earnings and hence a negative payout ratio. The dividend may be in danger.
DP-123.16%
EPS Next 2Y26.8%
EPS Next 3Y22%
5.2
-0.04 (-0.76%)
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-2.21%
Ins Owners1.36%
Ins Owner Change1.12%
Market Cap671.94M
Revenue(TTM)987.30M
Net Income(TTM)-86.34M
Analysts73.85
Price Target7.11 (36.73%)
Short Float %3.82%
Short Ratio5.29
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 14.06% |
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)0.91%
EPS NQ rev (1m)4.34%
EPS NQ rev (3m)-8.57%
EPS NY rev (1m)10.5%
EPS NY rev (3m)-5.1%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)9.68%
Revenue NY rev (1m)-3.37%
Revenue NY rev (3m)-17.25%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8 | ||
| Fwd PE | 6.22 | ||
| P/S | 0.61 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 0.64 | ||
| P/tB | 0.66 | ||
| EV/EBITDA | 177.18 |
EPS(TTM)0.65
EY12.5%
EPS(NY)0.84
Fwd EY16.08%
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
WACC4.54%
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%-41.18%
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 4 / 10 and the dividend payout ratio is -123.16%.