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REDWOOD TRUST INC (RWT) Stock Fundamental Analysis

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

5.45  -0.09 (-1.62%)

After market: 5.45 0 (0%)

Fundamental Rating

4

RWT gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 65 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. RWT may be in some trouble as it scores bad on both profitability and health. RWT is not overvalued while it is showing excellent growth. This is an interesting combination.


Dividend Valuation Growth Profitability Health

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.
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.
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

The Return On Assets of RWT (0.23%) is comparable to the rest of the industry.
With a Return On Equity value of 3.59%, RWT perfoms like the industry average, outperforming 46.15% of the companies in the same industry.
RWT has a Return On Invested Capital of 0.42%. This is comparable to the rest of the industry: RWT outperforms 47.69% of its industry peers.
Industry RankSector Rank
ROA 0.23%
ROE 3.59%
ROIC 0.42%
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's Profit Margin of 4.31% is in line compared to the rest of the industry. RWT outperforms 41.54% of its industry peers.
In the last couple of years the Profit Margin of RWT has declined.
RWT has a Operating Margin (10.26%) which is in line with its industry peers.
RWT's Operating Margin has declined in the last couple of years.
The Gross Margin of RWT (12.54%) is worse than 78.46% of its industry peers.
RWT's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 10.26%
PM (TTM) 4.31%
GM 12.54%
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

1

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
Compared to 1 year ago, RWT has a worse debt to assets ratio.
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 0.10. This is a bad value and indicates that RWT is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of RWT (0.10) is better than 75.38% of its industry peers.
A Debt/Equity ratio of 14.09 is on the high side and indicates that RWT has dependencies on debt financing.
RWT has a Debt to Equity ratio of 14.09. This is amonst the worse of the industry: RWT underperforms 95.38% of its industry peers.
Industry RankSector Rank
Debt/Equity 14.09
Debt/FCF N/A
Altman-Z 0.1
ROIC/WACC0.09
WACC4.6%
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

RWT has a Current Ratio of 0.25. This is a bad value and indicates that RWT is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of RWT (0.25) is better than 63.08% of its industry peers.
A Quick Ratio of 0.25 indicates that RWT may have some problems paying its short term obligations.
The Quick ratio of RWT (0.25) is better than 63.08% of its industry peers.
Industry RankSector Rank
Current Ratio 0.25
Quick Ratio 0.25
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

7

3. Growth

3.1 Past

RWT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 163.64%, 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 29.69%.
The Revenue has been growing by 9.67% on average over the past years. This is quite good.
EPS 1Y (TTM)163.64%
EPS 3Y-39.69%
EPS 5Y-19.83%
EPS Q2Q%75%
Revenue 1Y (TTM)29.69%
Revenue growth 3Y19.75%
Revenue growth 5Y9.67%
Sales Q2Q%16.25%

3.2 Future

The Earnings Per Share is expected to grow by 15.34% on average over the next years. This is quite good.
RWT is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.89% yearly.
EPS Next Y37.66%
EPS Next 2Y30.74%
EPS Next 3Y15.34%
EPS Next 5YN/A
Revenue Next Year24.4%
Revenue Next 2Y10.83%
Revenue Next 3Y8.89%
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.
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

6

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 9.40, the valuation of RWT can be described as reasonable.
RWT's Price/Earnings ratio is a bit cheaper when compared to the industry. RWT is cheaper than 70.77% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.25. RWT is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 6.13, the valuation of RWT can be described as very cheap.
RWT's Price/Forward Earnings ratio is rather cheap when compared to the industry. RWT is cheaper than 90.77% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.15. RWT is valued rather cheaply when compared to this.
Industry RankSector Rank
PE 9.4
Fwd PE 6.13
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 80.00% of the companies in the same industry.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 138.52
RWT Per share dataRWT EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 -10 -20 -30 -40

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 15.34% in the coming years.
PEG (NY)0.25
PEG (5Y)N/A
EPS Next 2Y30.74%
EPS Next 3Y15.34%

4

5. Dividend

5.1 Amount

RWT has a Yearly Dividend Yield of 12.50%, which is a nice return.
Compared to an average industry Dividend Yield of 14.38, 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 2.40.
Industry RankSector Rank
Dividend Yield 12.5%

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

234.54% of the earnings are spent on dividend by RWT. This is not a sustainable payout ratio.
DP234.54%
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

REDWOOD TRUST INC

NYSE:RWT (5/30/2025, 8:04:00 PM)

After market: 5.45 0 (0%)

5.45

-0.09 (-1.62%)

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 Owners79.96%
Inst Owner Change-0.77%
Ins Owners1.17%
Ins Owner Change4.1%
Market Cap725.50M
Analysts75.38
Price Target7.59 (39.27%)
Short Float %2.94%
Short Ratio3.31
Dividend
Industry RankSector Rank
Dividend Yield 12.5%
Yearly Dividend0.76
Dividend Growth(5Y)-10.27%
DP234.54%
Div Incr Years0
Div Non Decr Years0
Ex-Date03-24 2025-03-24 (0.18)
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.09%
Min EPS beat(2)-21.87%
Max EPS beat(2)26.06%
EPS beat(4)1
Avg EPS beat(4)-3.13%
Min EPS beat(4)-21.87%
Max EPS beat(4)26.06%
EPS beat(8)1
Avg EPS beat(8)-38.17%
EPS beat(12)2
Avg EPS beat(12)-82.2%
EPS beat(16)5
Avg EPS beat(16)-48.18%
Revenue beat(2)0
Avg Revenue beat(2)-9.57%
Min Revenue beat(2)-14.39%
Max Revenue beat(2)-4.75%
Revenue beat(4)1
Avg Revenue beat(4)-7.86%
Min Revenue beat(4)-15.25%
Max Revenue beat(4)2.94%
Revenue beat(8)1
Avg Revenue beat(8)-18.3%
Revenue beat(12)5
Avg Revenue beat(12)94.09%
Revenue beat(16)9
Avg Revenue beat(16)194.63%
PT rev (1m)-7.35%
PT rev (3m)-7.99%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-9.8%
EPS NY rev (1m)-9.67%
EPS NY rev (3m)-8.36%
Revenue NQ rev (1m)1.18%
Revenue NQ rev (3m)0.15%
Revenue NY rev (1m)8.72%
Revenue NY rev (3m)16.36%
Valuation
Industry RankSector Rank
PE 9.4
Fwd PE 6.13
P/S 0.73
P/FCF N/A
P/OCF N/A
P/B 0.61
P/tB 0.63
EV/EBITDA 138.52
EPS(TTM)0.58
EY10.64%
EPS(NY)0.89
Fwd EY16.31%
FCF(TTM)-44.04
FCFYN/A
OCF(TTM)-44.04
OCFYN/A
SpS7.42
BVpS8.92
TBVpS8.6
PEG (NY)0.25
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 0.23%
ROE 3.59%
ROCE 0.62%
ROIC 0.42%
ROICexc 0.42%
ROICexgc 0.43%
OM 10.26%
PM (TTM) 4.31%
GM 12.54%
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 14.09
Debt/FCF N/A
Debt/EBITDA 147.83
Cap/Depr N/A
Cap/Sales N/A
Interest Coverage 0.12
Cash Conversion N/A
Profit Quality N/A
Current Ratio 0.25
Quick Ratio 0.25
Altman-Z 0.1
F-Score3
WACC4.6%
ROIC/WACC0.09
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)29.69%
Revenue growth 3Y19.75%
Revenue growth 5Y9.67%
Sales Q2Q%16.25%
Revenue Next Year24.4%
Revenue Next 2Y10.83%
Revenue Next 3Y8.89%
Revenue Next 5YN/A
EBIT growth 1Y97.69%
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-190.82%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-190.82%
OCF growth 3YN/A
OCF growth 5YN/A