Redwood (RWT) AI Stock Analysis

• Market Cap: $722.09M
• Dividend Yield: 13.13%
• Average Volume (3M): 1.48M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.90
• Revenue Growth: 34.68%
• EPS Growth: -251.91%
• Country: US
• Employees: 283
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Mortgage
• EPS (TTM): -0.08
• Shares Outstanding: 126,682,210
• 10 Day Avg. Volume: 1,332,717
• 30 Day Avg. Volume: 1,483,510
• PEG Ratio: -0.04
• Price to Book (P/B): 0.73
• Price to Sales (P/S): 3.56
• P/FCF Ratio: -0.15
• Enterprise Value/Market Cap: 29.84
• Enterprise Value/Revenue: 101.29
• Enterprise Value/Gross Profit: 122.45
• Enterprise Value/Ebitda: 29.39
• 1Y Price Target: $7.00
• Price Target Upside: 23.89% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 49 Neutral
• Price Target: $5.50 ▼(-2.65% Downside)

The score is held down primarily by weak financial performance: TTM losses, very high leverage, and deeply negative operating/free cash flow. Offsetting this, technical indicators are moderately positive and the dividend yield is attractive, while the earnings call showed improving core operations and legacy reduction but still included GAAP losses and book value pressure.

Positive Factors

Record Loan Origination

Achieving record loan origination amid a subdued market demonstrates Redwood's strong operational capabilities and market positioning, which can drive sustained revenue growth.

Strategic Partnerships

Expanding strategic partnerships enhances Redwood's financial flexibility and access to capital, supporting long-term growth and investment opportunities.

Core Segment Performance

Consistent high returns in core segments indicate strong operational efficiency and profitability, which are crucial for long-term financial health and shareholder value.

Negative Factors

High Leverage

High leverage poses financial risks, limiting flexibility and increasing vulnerability to market fluctuations, which can impact long-term stability and growth.

Negative Cash Flows

Negative cash flows highlight inefficiencies in cash generation, potentially constraining Redwood's ability to invest in growth opportunities and service debt.

Legacy Asset Challenges

Ongoing challenges with legacy assets can drag on profitability and capital efficiency, hindering Redwood's ability to fully capitalize on new growth opportunities.

Redwood Business Overview & Revenue Model

Company Description

Redwood Trust, Inc., together with its subsidiaries, operates as a specialty finance company in the United States. The company operates through three segments: Residential Mortgage Banking, Business Purpose Mortgage Banking, and Investment Portfolio. The Residential Mortgage Banking segment operates a mortgage loan conduit that acquires residential loans from third-party originators for subsequent sale, securitization, or transfer to its investment portfolio. This segment also offers derivative financial instruments to manage risks associated with residential loans. The Business Purpose Mortgage Banking segment operates a platform that originates and acquires business purpose loans, such as single-family rental and bridge loans for subsequent securitization, sale, or transfer into its investment portfolio. The Investment Portfolio segment invests in securities retained from residential and business purpose securitization activities, and residential and small-balance multifamily bridge loans, as well as residential mortgage-backed securities issued by third parties, Freddie Mac K-Series multifamily loan securitizations and reperforming loan securitizations, servicer advance investments, home equity investments, and other housing-related investments. The company qualifies as a real estate investment trust (REIT) for federal income tax purposes. As a REIT, it intends to distribute at least 90% of its taxable income as dividends to shareholders. Redwood Trust, Inc. was incorporated in 1994 and is headquartered in Mill Valley, California.

How the Company Makes Money

Redwood Trust, Inc. makes money primarily through the acquisition and management of residential and commercial real estate loans and securities. The company generates revenue from interest income on its portfolio of loans and mortgage-backed securities. Additionally, Redwood Trust earns money through the sale and securitization of mortgage loans, where it packages and sells loans to investors, generating fees and income. The company also benefits from strategic partnerships with financial institutions and other investors to enhance its investment opportunities and revenue streams.

Redwood Financial Statement Overview

Summary

Overall financial quality is pressured: TTM net income is a loss (-$88.5M), leverage is extremely high (debt-to-equity ~21x), and operating/free cash flow are deeply negative (TTM OCF -$7.6B). High gross margins are a partial offset, but earnings volatility and balance-sheet risk dominate.

Income Statement

Profitability has deteriorated meaningfully: TTM (Trailing-Twelve-Months) net income is a loss (-$88.5M) versus a profit in 2024 ($54.0M). Revenue is also down in TTM (Trailing-Twelve-Months) (-3.8% growth rate). A positive offset is that gross profit margins remain high in both 2024 (~86%) and TTM (~83%), but results have been volatile across years (including periods with negative revenue), which lowers confidence in earnings stability.

Balance Sheet

Leverage is very high and rising, with total debt at ~$21.0B against equity of ~$1.0B in TTM (Trailing-Twelve-Months), translating to a debt-to-equity ratio of ~21x (up from ~13.8x in 2024). With negative TTM (Trailing-Twelve-Months) return on equity (~-8%), the balance sheet is more exposed to funding costs, asset value swings, and refinancing risk—key sensitivities for a mortgage REIT.

Cash Flow

Cash generation is weak: operating cash flow is deeply negative in both TTM (Trailing-Twelve-Months) (-$7.6B) and 2024 (-$5.9B), and free cash flow is equally negative. While TTM (Trailing-Twelve-Months) free cash flow shows a positive growth rate versus the prior period, the absolute level remains substantially negative, indicating ongoing cash burn/working-capital or portfolio-related outflows.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	212.73M	242.50M	158.60M	-22.10M	539.60M	-318.03M
Gross Profit	175.97M	208.91M	136.86M	-41.82M	517.62M	-330.76M
EBITDA	733.18M	0.00	0.00	398.85M	800.74M	-30.75M
Net Income	-88.47M	54.00M	-2.27M	-163.52M	319.61M	-581.85M
Balance Sheet
Total Assets	22.60B	18.26B	14.50B	13.03B	14.71B	10.36B
Cash, Cash Equivalents and Short-Term Investments	510.69M	456.64M	380.48M	391.04M	657.28M	679.46M
Total Debt	21.03B	16.39B	12.84B	11.50B	12.88B	8.85B
Total Liabilities	21.60B	17.07B	13.30B	11.95B	13.32B	9.24B
Stockholders Equity	999.01M	1.19B	1.20B	1.08B	1.39B	1.11B
Cash Flow
Free Cash Flow	-7.59B	-5.86B	-2.02B	-139.14M	-5.69B	-505.47M
Operating Cash Flow	-7.59B	-5.86B	-2.02B	-139.14M	-5.69B	-505.47M
Investing Cash Flow	3.92B	2.54B	908.72M	213.89M	1.40B	4.07B
Financing Cash Flow	3.67B	3.27B	1.15B	-276.87M	4.28B	-3.31B

Redwood Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.65
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RWT, the sentiment is Positive. The current price of 5.65 is above the 20-day moving average (MA) of 5.53, above the 50-day MA of 5.31, and above the 200-day MA of 5.39, indicating a bullish trend. The MACD of 0.06 indicates Positive momentum. The RSI at 58.23 is Neutral, neither overbought nor oversold. The STOCH value of 74.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RWT.

Redwood Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
TRTX	64 Neutral	$707.48M	13.87	5.87%	10.48%	-10.86%	-5.90%
MFA	61 Neutral	$990.28M	11.39	6.90%	14.90%	5.52%	-47.72%
FBRT	61 Neutral	$808.72M	12.41	5.88%	13.31%	-0.93%	-1.92%
KREF	52 Neutral	$523.20M	-23.03	-0.16%	11.33%	-24.37%	-19.19%
RWT	49 Neutral	$722.09M	-6.86	-9.19%	13.13%	34.68%	-251.91%
RC	44 Neutral	$350.19M	-1.07	-14.78%	26.82%	-43.56%	-166.72%

Redwood Corporate Events

Redwood Declares Q4 2025 Dividends for Shareholders

On December 8, 2025, Redwood Trust, Inc. announced that its Board of Directors declared fourth quarter 2025 dividends for both common and preferred stock. The common stock dividend remains at $0.18 per share, marking the company’s 106th consecutive quarterly dividend, payable on December 30, 2025. The preferred stock dividend for Series A is set at $0.625 per share, payable on January 15, 2026. This announcement reflects Redwood’s ongoing commitment to providing stable returns to its shareholders.

The most recent analyst rating on (RWT) stock is a Buy with a $8.50 price target. To see the full list of analyst forecasts on Redwood stock, see the RWT Stock Forecast page.

Redwood Completes $100M Senior Notes Offering

On November 19, 2025, Redwood Trust, Inc. completed a public offering of $100 million in senior notes due 2030, with a 9.500% interest rate. The offering, underwritten by major financial institutions, aims to raise approximately $96.4 million in net proceeds for general corporate purposes, including funding its mortgage banking platforms and investment activities.

The most recent analyst rating on (RWT) stock is a Buy with a $8.50 price target. To see the full list of analyst forecasts on Redwood stock, see the RWT Stock Forecast page.

Redwood Trust Files Prospectus for $175M Stock Offering

On March 3, 2025, Redwood Trust, Inc. filed a new shelf registration statement with the SEC, replacing its previous registration from 2022. The company also filed a prospectus supplement on November 7, 2025, for its ongoing ‘at-the-market’ equity offering, allowing for the sale of common stock worth up to $175 million. Additionally, Redwood Trust amended its distribution agreement with several sales agents to facilitate the sale of shares under the new registration, maintaining the same material terms as before.

The most recent analyst rating on (RWT) stock is a Buy with a $8.50 price target. To see the full list of analyst forecasts on Redwood stock, see the RWT Stock Forecast page.

Redwood Reports Q3 2025 Financial Results and Strategic Shift

On October 29, 2025, Redwood Trust, Inc. announced its financial results for the third quarter of 2025, highlighting record production volumes and a strategic transition to a core operating model. The company reported a GAAP net loss of $9.5 million, driven by one-time expenses related to legacy investments, but achieved record mortgage banking production of $6.8 billion. Redwood also executed capital management initiatives, including the transfer of $1 billion in legacy investments and the repurchase of five million shares, while expanding its partnership with CPP Investments to support platform growth.

The most recent analyst rating on (RWT) stock is a Hold with a $6.00 price target. To see the full list of analyst forecasts on Redwood stock, see the RWT Stock Forecast page.

Redwood Expands Partnership with Canada Pension Plan

On October 28, 2025, Redwood Trust, Inc. announced an expansion of its strategic partnership with Canada Pension Plan Investment Board. This includes extending the joint venture commitment period to September 2028, increasing the secured revolving financing facility to $400 million, and amending warrants issued in March 2024 to extend their expiration and adjust the exercise price. These moves are expected to enhance Redwood’s operational flexibility and strengthen its market position.

The most recent analyst rating on (RWT) stock is a Hold with a $6.00 price target. To see the full list of analyst forecasts on Redwood stock, see the RWT Stock Forecast page.