REDWOOD TRUST INC (RWT) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:RWT - US7580754023 - REIT
5.78 USD
-0.04 (-0.69%)
5.78 USD
0 (0%)
RWT gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 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 showing excellent growth while it is valued at reasonable prices. Keep and eye on this one!
1. Profitability
1.1 Basic Checks
- In the past year RWT was profitable.
- In the past year RWT has reported a negative cash flow from operations.
- 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
- The Return On Assets of RWT (-0.48%) is worse than 72.06% of its industry peers.
- The Return On Equity of RWT (-10.92%) is worse than 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.48% | ||
| ROE | -10.92% | ||
| ROIC | 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
1.3 Margins
- RWT's Profit Margin has declined in the last couple of years.
- RWT's Operating Margin has declined in the last couple of years.
- Looking at the Gross Margin, with a value of 6.58%, 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.
- RWT does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 6.58% |
OM growth 3Y-58.99%
OM growth 5Y-33.77%
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 does not have a ROIC to compare to the WACC, probably because it is not profitable.
- RWT has more shares outstanding than it did 1 year ago.
- The number of shares outstanding for RWT has been increased compared to 5 years ago.
- RWT has a worse debt/assets ratio than last year.
2.2 Solvency
- RWT has an Altman-Z score of 0.01. This is a bad value and indicates that RWT is not financially healthy and even has some risk of bankruptcy.
- RWT has a Altman-Z score of 0.01. This is in the better half of the industry: RWT outperforms 60.29% of its industry peers.
- A Debt/Equity ratio of 21.20 is on the high side and indicates that RWT has dependencies on debt financing.
- RWT has a worse Debt to Equity ratio (21.20) than 95.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 21.2 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.01 |
ROIC/WACCN/A
WACC4.59%
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.
- Looking at the Quick ratio, with a value of 0.17, RWT is in line with its industry, outperforming 51.47% of the companies in the same industry.
| 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.
- 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 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 21.24% yearly.
- RWT is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 12.80% yearly.
EPS Next Y48.39%
EPS Next 2Y30.52%
EPS Next 3Y21.24%
EPS Next 5YN/A
Revenue Next Year-11.34%
Revenue Next 2Y13.85%
Revenue Next 3Y12.8%
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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 8.89, the valuation of RWT can be described as very reasonable.
- 73.53% of the companies in the same industry are more expensive than RWT, based on the Price/Earnings ratio.
- RWT is valuated cheaply when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
- With a Price/Forward Earnings ratio of 6.52, the valuation of RWT can be described as very cheap.
- 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.
- The average S&P500 Price/Forward Earnings ratio is at 25.98. RWT is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.89 | ||
| Fwd PE | 6.52 |
4.2 Price Multiples
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | N/A |
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 21.24% in the coming years.
PEG (NY)0.18
PEG (5Y)N/A
EPS Next 2Y30.52%
EPS Next 3Y21.24%
5. Dividend
5.1 Amount
- RWT has a Yearly Dividend Yield of 12.79%, which is a nice return.
- RWT's Dividend Yield is a higher than the industry average which is at 11.26.
- RWT's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 12.79% |
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 2Y30.52%
EPS Next 3Y21.24%
REDWOOD TRUST INC / RWT FAQ
What is the ChartMill fundamental rating of REDWOOD TRUST INC (RWT) stock?
ChartMill assigns a fundamental rating of 4 / 10 to RWT.
Can you provide the valuation status for REDWOOD TRUST INC?
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 financial health of REDWOOD TRUST INC (RWT) stock?
The financial health rating of REDWOOD TRUST INC (RWT) is 1 / 10.
What is the earnings growth outlook for REDWOOD TRUST INC?
The Earnings per Share (EPS) of REDWOOD TRUST INC (RWT) is expected to grow by 48.39% in the next year.