RWT Stock Analysis: Redwood Trust | NYSE
REIT - Mortgage | NYSE, USA | Market Cap: 636m USD | 12M Return: -2.9% | Charts, Fundamentals & Technical Analysis
Avg Turnover: 13.7M
EPS Trend: 55.4%
Qual. Beats: 0
Rev. Trend: 98.4%
Qual. Beats: 6
Warnings
Tailwinds
No distinct edge detected
Seasonality 10.5 years of data
How good or bad each month usually is (without trend). The score below shows how much you can trust it: 0 = pure chance, >40 gets interesting and >55 is strong.
Redwood Trust, Inc. (RWT) is a U.S.-based specialty finance company structured around four operating segments: Sequoia Mortgage Banking, CoreVest Mortgage Banking, Redwood Investments, and Legacy Investments. Its mortgage banking segments function as conduits, acquiring residential loans from third-party originators (Sequoia) and originating residential investor loans (CoreVest) for subsequent securitization, sale, or transfer into the companys investment portfolio. Redwood Investments targets assets with sensitivity to housing credit risk sourced through the companys own underwriting platforms, with a stated strategic shift toward retained interests from internally originated securitizations rather than third-party securities. The Legacy Investments segment holds non-core assets, including legacy bridge loans and re-performing loan securities, that are being wound down as part of an accelerated repositioning of the business.
As a mortgage REIT, Redwood operates in a sector that earns income from the spread between the yields on mortgage-related assets and the cost of financing them, making the business highly sensitive to interest rate movements and credit spreads. The company was incorporated in 1994 and is headquartered in Mill Valley, California.
- Sequoia gain-on-sale margins compress on volatile mortgage rates
- CoreVest investor loan originations decline amid housing market slowdown
- Legacy asset runoff accelerates under accelerated strategic repositioning
| Net Income: -91.7m TTM > 0 and > 6% of Revenue |
| FCF/TA: -0.47 > 0.02 and ΔFCF/TA -12.65 > 1.0 |
| NWC/Revenue: -279.9% < 20% (prev 54.27%; Δ -334.2% < -1%) |
| CFO/TA -0.47 > 3% & CFO -12.6b > Net Income -91.7m |
| Current Ratio: 0.06 > 1.5 & < 3 |
| Outstanding Shares: last quarter (124.8m) vs 12m ago -6.02% < -2% |
| Gross Margin: 21.31% > 18% (prev 42.88%; Δ -21.57% > 0.5%) |
| Asset Turnover: 4.83% > 50% (prev 2.40%; Δ 2.43% > 0%) |
| Interest Coverage Ratio: 0.19 > 6 (EBIT TTM 225.8m / Interest Expense TTM 1.18b) |
| A: -0.12 (Total Current Assets 202.0m - Total Current Liabilities 3.36b) / Total Assets 26.8b |
| B: -0.06 (Retained Earnings -1.55b / Total Assets 26.8b) |
| C: 0.01 (EBIT TTM 225.8m / Avg Total Assets 23.3b) |
| D: 0.04 (Book Value of Equity 957.0m / Total Liabilities 25.9b) |
| Altman-Z'' = -0.86 = CCC |
| DSRI: 0.67 (Receivables 302.7m/191.7m, Revenue 1.13b/476.0m) |
| GMI: 2.01 (GM 42.88% / 21.31%) |
| AQI: 1.01 (AQ_t 0.99 / AQ_t-1 0.99) |
| SGI: 2.37 (Revenue 1.13b / 476.0m) |
| TATA: 0.47 (NI -91.7m - CFO -12.6b) / TA 26.8b) |
| Beneish M = -1.35 (Cap -4..+1) = D |
As of July 13, 2026, the stock is trading at USD 5.10 with a total of 3,201,906 shares traded. Over the past week, the price has changed by +13.84%, over one month by +0.79%, over three months by -11.37% and over the past year by -2.89%.
Current recommended Stop Loss: 4.80 (which is 5.9% or 1.4 ATR below the current price).
Redwood Trust has received a consensus analysts rating of 4.00. Therefore, it is recommended to buy RWT.
- StrongBuy: 3
- Buy: 2
- Hold: 3
- Sell: 0
- StrongSell: 0
| Analysts Target Price | 6.5 | 28% |
P/E Forward = 5.8962
P/S = 3.7986
P/B = 0.6685
P/EG = 1.4723
Revenue TTM = 1.13b USD
EBIT TTM = 225.8m USD
EBITDA TTM = 235.4m USD
Long Term Debt = 21.8b USD (from longTermDebt, last quarter)
Short Term Debt = 3.36b USD (from shortTermDebt, last quarter)
Debt = 25.3b USD (from shortLongTermDebtTotal, last quarter) + Leases 9.71m
Net Debt = 24.6b USD (calculated: Debt 25.3b - CCE 678.8m)
Enterprise Value = 25.3b USD (636.1m + Debt 25.3b - CCE 678.8m)
Interest Coverage Ratio = 0.19 (Ebit TTM 225.8m / Interest Expense TTM 1.18b)
EV/FCF = -2.00x (Enterprise Value 25.3b / FCF TTM -12.6b)
FCF Yield = -50.09% (FCF TTM -12.6b / Enterprise Value 25.3b)
FCF Margin = -1.12k% (FCF TTM -12.6b / Revenue TTM 1.13b)
Net Margin = -8.14% (Net Income TTM -91.7m / Revenue TTM 1.13b)
Gross Margin = 21.31% ((Revenue TTM 1.13b - Cost of Revenue TTM 886.5m) / Revenue TTM)
Gross Margin QoQ = 13.08% (prev none%)
Tobins Q-Ratio = 0.94 (Enterprise Value 25.3b / Total Assets 26.8b)
Interest Expense / Debt = 4.66% (Interest Expense 1.18b / Debt 25.3b)
Taxrate = 21.0% (US federal default 21%)
NOPAT = 178.4m (EBIT 225.8m * (1 - 21.00%))
Current Ratio = 0.06 (Total Current Assets 202.0m / Total Current Liabilities 3.36b)
Debt / Equity = 26.43 (Debt 25.3b / totalStockholderEquity, last quarter 957.0m)
Debt / EBITDA = 104.6 (Net Debt 24.6b / EBITDA 235.4m)
Debt / FCF = -1.95 (negative FCF - burning cash) (Net Debt 24.6b / FCF TTM -12.6b)
Total Stockholder Equity = 998.0m (last 4 quarters mean from totalStockholderEquity)
RoA = -0.39% (Net Income -91.7m / Total Assets 26.8b)
RoE = -9.19% (Net Income TTM -91.7m / Total Stockholder Equity 998.0m)
RoCE = 0.99% (EBIT 225.8m / Capital Employed (Equity 998.0m + L.T.Debt 21.8b))
RoIC = 0.67% (NOPAT 178.4m / Invested Capital 26.8b)
WACC = 3.80% (E(636.1m)/V(25.9b) * Re(8.38%) + D(25.3b)/V(25.9b) * Rd(4.66%) * (1-Tc(0.21)))
Discount Rate = 8.38% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: 2.22 | Cagr: 3.18%
[DCF] Fair Price = unknown (Cash Flow -12.6b)
EPS Correlation: 55.42 | EPS CAGR: 20.39% | SUE: 0.33 | # QB: 0
Revenue Correlation: 98.44 | Revenue CAGR: 190.6% | SUE: 1.04 | # QB: 6
EPS current Quarter (2026-06-30): EPS=0.24 | Chg30d=-1.86% | Revisions=+12% | Analysts=7
EPS next Quarter (2026-09-30): EPS=0.25 | Chg30d=-0.71% | Revisions=+0% | Analysts=7
EPS current Year (2026-12-31): EPS=0.96 | Chg30d=-1.10% | Revisions=+0% | GrowthEPS=+371.9% | GrowthRev=+65.0%
EPS next Year (2027-12-31): EPS=1.03 | Chg30d=+1.15% | Revisions=+12% | GrowthEPS=+6.8% | GrowthRev=+25.7%
[Analyst] Revisions Ratio: +12% (up=8, down=6)