RWT Stock Analysis: Redwood Trust | NYSE
REIT - Mortgage | NYSE, USA | Market Cap: 383m USD | 12M Return: -40.2% | US7580754023 | Charts, Fundamentals & Technical Analysis
Avg Turnover: 16.2M
EPS Trend: 58.5%
Qual. Beats: 0
Rev. Trend: 97.1%
Qual. Beats: 0
Warnings
Tailwinds
No distinct edge detected
Seasonality 11.7 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. (NYSE: RWT) is a U.S.-based specialty finance company operating in the Financials sector, specifically within the Mortgage REITs sub-industry. The company runs four business segments focused on residential mortgage banking, investment activities tied to housing credit, and the wind-down of legacy assets.
The Sequoia Mortgage Banking segment functions as a loan conduit, acquiring residential mortgage loans from third-party originators for sale, securitization, or transfer into the investment portfolio. The CoreVest Mortgage Banking segment originates residential investor loans (loans made to borrowers purchasing or refinancing single-family rental properties) for similar downstream uses and employs derivative instruments to hedge risks on its held-for-sale inventory. Redwood Investments is the companys portfolio segment, targeting assets with exposure to housing credit risk sourced through its own operating platforms. Management has indicated a strategic shift away from third-party securities toward retained interests from its own securitizations and investment vehicles.
The Legacy Investments segment holds non-core assets, including bridge loans, term loans, and re-performing loan securities (residential mortgages previously delinquent but brought back to performing status), which are being sold off, run off, or otherwise disposed of as part of an accelerated repositioning of the business. Redwood Trust was incorporated in 1994 and is headquartered in Mill Valley, California.
- Sequoia mortgage banking gain-on-sale margins compress with rate volatility
- Legacy asset runoff accelerates as repositioning completes
- CoreVest investor loan origination scales amid rental housing demand
| Net Income: 5.72m TTM > 0 and > 6% of Revenue |
| FCF/TA: -0.50 > 0.02 and ΔFCF/TA -16.71 > 1.0 |
| NWC/Revenue: -348.2% < 20% (prev 47.07%; Δ -395.3% < -1%) |
| CFO/TA -0.50 > 3% & CFO -14.3b > Net Income 5.72m |
| Net Debt (26.8b) to EBITDA (682.2m): 39.31 < 3 |
| Current Ratio: 0.05 > 1.5 & < 3 |
| Outstanding Shares: last quarter (125.3m) vs 12m ago -5.77% < -2% |
| Gross Margin: 34.94% > 18% (prev 94.74%; Δ -59.80% > 0.5%) |
| Asset Turnover: 3.85% > 50% (prev 2.99%; Δ 0.86% > 0%) |
| Interest Coverage Ratio: 0.74 > 6 (EBIT TTM 672.9m / Interest Expense TTM 913.8m) |
| A: -0.12 (Total Current Assets 191.8m - Total Current Liabilities 3.55b) / Total Assets 28.8b |
| B: -0.05 (Retained Earnings -1.58b / Total Assets 28.8b) |
| C: 0.03 (EBIT TTM 672.9m / Avg Total Assets 25.1b) |
| D: 0.03 (Book Value of Equity 934.0m / Total Liabilities 27.9b) |
| Altman-Z'' = -0.73 = B |
| DSRI: 3.0 (Receivables 26.8b/273.6m, Revenue 965.0m/638.2m) |
| GMI: 2.71 (GM 94.74% / 34.94%) |
| AQI: 1.01 (AQ_t 0.99 / AQ_t-1 0.99) |
| SGI: 1.51 (Revenue 965.0m / 638.2m) |
| TATA: 0.50 (NI 5.72m - CFO -14.3b) / TA 28.8b) |
| Beneish M = 0.60 (Cap -4..+1) = D |
As of October 15, 2026, the stock is trading at USD 2.95 with a total of 3,227,791 shares traded. Over the past week, the price has changed by -11.68%, over one month by -19.45%, over three months by -39.39% and over the past year by -40.16%.
Current recommended Stop Loss: 2.70 (which is 8.5% or 1.5 ATR below the current price).
Redwood Trust has received a consensus analysts rating of 4.22. Therefore, it is recommended to buy RWT.
- StrongBuy: 4
- Buy: 3
- Hold: 2
- Sell: 0
- StrongSell: 0
| Analysts Target Price | 5.4 | 81.7% |
P/E Forward = 6.1538
P/S = 1.4647
P/B = 0.5955
P/EG = 1.4723
Revenue TTM = 965.0m USD
EBIT TTM = 672.9m USD
EBITDA TTM = 682.2m USD
Long Term Debt = 24.1b USD (from longTermDebt, last quarter)
Short Term Debt = 3.26b USD (from shortTermDebt, last quarter)
Debt = 27.5b USD (from shortLongTermDebtTotal, last quarter) + Leases 13.4m
Net Debt = 26.8b USD (calculated: Debt 27.5b - CCE 672.7m)
Enterprise Value = 27.2b USD (383.1m + Debt 27.5b - CCE 672.7m)
Interest Coverage Ratio = 0.74 (Ebit TTM 672.9m / Interest Expense TTM 913.8m)
EV/FCF = -1.90x (Enterprise Value 27.2b / FCF TTM -14.3b)
FCF Yield = -52.52% (FCF TTM -14.3b / Enterprise Value 27.2b)
FCF Margin = -1.48k% (FCF TTM -14.3b / Revenue TTM 965.0m)
Net Margin = 0.59% (Net Income TTM 5.72m / Revenue TTM 965.0m)
Gross Margin = 34.94% ((Revenue TTM 965.0m - Cost of Revenue TTM 627.8m) / Revenue TTM)
Gross Margin QoQ = 78.93% (prev 13.08%)
Tobins Q-Ratio = 0.94 (Enterprise Value 27.2b / Total Assets 28.8b)
Interest Expense / Debt = 3.32% (Interest Expense 913.8m / Debt 27.5b)
Taxrate = 21.0% (US federal default 21%)
NOPAT = 531.6m (EBIT 672.9m * (1 - 21.00%))
Current Ratio = 0.05 (Total Current Assets 191.8m / Total Current Liabilities 3.55b)
Debt / Equity = 29.43 (Debt 27.5b / totalStockholderEquity, last quarter 934.0m)
Debt / EBITDA = 39.31 (Net Debt 26.8b / EBITDA 682.2m)
Debt / FCF = -1.88 (negative FCF - burning cash) (Net Debt 26.8b / FCF TTM -14.3b)
Total Stockholder Equity = 968.2m (last 4 quarters mean from totalStockholderEquity)
RoA = 0.02% (Net Income 5.72m / Total Assets 28.8b)
RoE = 0.59% (Net Income TTM 5.72m / Total Stockholder Equity 968.2m)
RoCE = 2.69% (EBIT 672.9m / Capital Employed (Equity 968.2m + L.T.Debt 24.1b))
RoIC = 1.66% (NOPAT 531.6m / Invested Capital 32.0b)
WACC = 2.70% (E(383.1m)/V(27.9b) * Re(8.23%) + D(27.5b)/V(27.9b) * Rd(3.32%) * (1-Tc(0.21)))
Discount Rate = 8.23% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: -81.96 | Cagr: -2.14%
[DCF] Fair Price = unknown (Cash Flow -14.3b)
EPS Correlation: 58.46 | EPS CAGR: 25.77% | SUE: -0.08 | # QB: 0
Revenue Correlation: 97.06 | Revenue CAGR: 161.4% | SUE: 0.05 | # QB: 0
EPS current Quarter (2026-09-30): EPS=0.24 | Chg30d=-3.24% | Revisions=-67% | Analysts=5
EPS current Year (2026-12-31): EPS=1.01 | Chg30d=-1.75% | Revisions=-44% | GrowthEPS=+396.0% | GrowthRev=+73.7%
EPS next Year (2027-12-31): EPS=1.05 | Chg30d=-3.13% | Revisions=-17% | GrowthEPS=+3.8% | GrowthRev=+12.8%
[Analyst] Revisions Ratio: -61% (up=2, down=13)