(RWT) Redwood Trust - Overview
Sector: Real Estate | Industry: REIT - Mortgage | Exchange: NYSE (USA) | Market Cap: 661m USD | Total Return: 10.9% in 12m
Avg Turnover: 5.42M
Qual. Beats: 0
Rev. Trend: 97.6%
Qual. Beats: 0
Warnings
Choppy
Tailwinds
No distinct edge detected
Redwood Trust, Inc. (NYSE: RWT) is a specialty finance company structured as a mortgage real estate investment trust (REIT). The firm operates through four primary segments: Sequoia Mortgage Banking, CoreVest Mortgage Banking, Redwood Investments, and Legacy Investments. Its core business model involves acquiring and originating residential mortgage loans for securitization or long-term investment, with a specific focus on both consumer residential mortgages and business-purpose loans for investors.
The company is currently executing a strategic shift to prioritize internally originated assets over third-party securities to gain better control over underwriting and credit risk. As a mortgage REIT, Redwood Trust typically generates income from the spread between interest earned on its mortgage assets and the costs of funding those positions. The sector is highly sensitive to interest rate fluctuations and housing market credit trends, which impact the valuation of mortgage-backed securities and loan portfolios.
The Legacy Investments segment is being actively reduced as the company moves away from non-core assets like unsecuritized bridge loans and re-performing loan securities. Investors should examine the detailed financial metrics available on ValueRay to better understand the companys valuation. Redwood Trust remains headquartered in Mill Valley, California, and has maintained its operations in the mortgage conduit and securitization markets since its incorporation in 1994.
- Interest rate volatility impacts residential mortgage loan conduit and securitization volumes
- Housing credit performance drives valuation of retained interests in investment portfolios
- Strategic shift toward internally originated investments improves asset transparency and margins
- Business purpose loan demand influences CoreVest platform origination and securitization revenue
- Accelerated disposition of legacy non-core assets reduces balance sheet complexity and risk
| 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: -374.1% < 20% (prev 18.32%; Δ -392.4% < -1%) |
| CFO/TA -0.47 > 3% & CFO -12.6b > Net Income -91.7m |
| Net Debt (24.6b) to EBITDA (557.6m): 44.15 < 3 |
| Current Ratio: 0.06 > 1.5 & < 3 |
| Outstanding Shares: last quarter (124.8m) vs 12m ago -6.02% < -2% |
| Gross Margin: 32.02% > 18% (prev 0.43%; Δ 3.16k% > 0.5%) |
| Asset Turnover: 3.61% > 50% (prev 2.40%; Δ 1.22% > 0%) |
| Interest Coverage Ratio: 0.64 > 6 (EBITDA TTM 557.6m / Interest Expense TTM 862.8m) |
| 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: 0.02 (EBIT TTM 548.0m / Avg Total Assets 23.3b) |
| D: -0.06 (Book Value of Equity -1.58b / Total Liabilities 25.9b) |
| Altman-Z'' = -0.87 = CCC |
| DSRI: 0.89 (Receivables 302.7m/191.7m, Revenue 843.0m/476.0m) |
| GMI: 1.34 (GM 32.02% / 42.88%) |
| AQI: 1.01 (AQ_t 0.99 / AQ_t-1 0.99) |
| SGI: 1.77 (Revenue 843.0m / 476.0m) |
| TATA: 0.47 (NI -91.7m - CFO -12.6b) / TA 26.8b) |
| Beneish M = -1.77 (Cap -4..+1) = CCC |
As of May 28, 2026, the stock is trading at USD 5.34 with a total of 620,105 shares traded.
Over the past week, the price has changed by +1.91%,
over one month by -7.13%,
over three months by -8.74% and
over the past year by +10.85%.
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 | 7 | 30.5% |
P/E Forward = 5.8962
P/S = 3.9481
P/B = 0.7445
P/EG = 1.4723
Revenue TTM = 843.0m USD
EBIT TTM = 548.0m USD
EBITDA TTM = 557.6m 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 (661.1m + Debt 25.3b - CCE 678.8m)
Interest Coverage Ratio = 0.64 (Ebit TTM 548.0m / Interest Expense TTM 862.8m)
EV/FCF = -2.00x (Enterprise Value 25.3b / FCF TTM -12.6b)
FCF Yield = -50.04% (FCF TTM -12.6b / Enterprise Value 25.3b)
FCF Margin = -1.50k% (FCF TTM -12.6b / Revenue TTM 843.0m)
Net Margin = -10.87% (Net Income TTM -91.7m / Revenue TTM 843.0m)
Gross Margin = 32.02% ((Revenue TTM 843.0m - Cost of Revenue TTM 573.0m) / Revenue TTM)
Gross Margin QoQ = 90.01% (prev none%)
Tobins Q-Ratio = 0.94 (Enterprise Value 25.3b / Total Assets 26.8b)
Interest Expense / Debt = 3.41% (Interest Expense 862.8m / Debt 25.3b)
Taxrate = 21.0% (US default 21%)
NOPAT = 432.9m (EBIT 548.0m * (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 = 44.15 (Net Debt 24.6b / EBITDA 557.6m)
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 = -3.60% (Net Income TTM -91.7m / Total Stockholder Equity 2.55b)
RoCE = 2.25% (EBIT 548.0m / Capital Employed (Equity 2.55b + L.T.Debt 21.8b))
RoIC = 1.61% (NOPAT 432.9m / Invested Capital 26.8b)
WACC = 2.84% (E(661.1m)/V(26.0b) * Re(8.33%) + D(25.3b)/V(26.0b) * Rd(3.41%) * (1-Tc(0.21)))
Discount Rate = 8.33% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: 2.22 | Cagr: 3.18%
[DCF] Fair Price = unknown (Cash Flow -12.6b)
EPS Correlation: N/A | EPS CAGR: N/A | SUE: 0.31 | # QB: 0
Revenue Correlation: 97.57 | Revenue CAGR: 178.0% | SUE: 0.18 | # QB: 0
EPS current Quarter (2026-06-30): EPS=0.24 | Chg30d=+2.59% | Revisions=+11% | Analysts=6
EPS next Quarter (2026-09-30): EPS=0.25 | Chg30d=+1.77% | Revisions=+0% | Analysts=6
EPS current Year (2026-12-31): EPS=0.97 | Chg30d=-0.57% | Revisions=+11% | GrowthEPS=+377.1% | GrowthRev=+65.0%
EPS next Year (2027-12-31): EPS=1.02 | Chg30d=+0.37% | Revisions=+11% | GrowthEPS=+4.4% | GrowthRev=+25.7%
[Analyst] Revisions Ratio: +11%