Redwood Trust (RWT)
NYSE:RWT
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Redwood
(NYSE:RWT)
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Rating:48Neutral
Price Target:
$5.50
â–¼(-8.33% Downside)
Action:ReiteratedDate:03/21/26
The score is held down primarily by weak financial performance (losses, very high and rising leverage, and inconsistent cash generation) and bearish technicals (price below key moving averages with negative MACD). Offsetting these are a very high dividend yield and a constructive earnings-call outlook pointing to improving operating results and coverage of the dividend, though execution and funding/rate risks remain material.
Positive Factors
Record Mortgage Banking Volume
Sustained, record mortgage banking volumes indicate scalable core platform demand and higher fee generation potential. High throughput (loans on balance sheet ~35 days) supports rapid capital turns, durable operating leverage, and recurring gain-on-sale revenues that should persist if platform execution continues.
Negative Factors
Very High Leverage
Extremely elevated leverage materially increases refinancing, funding-cost, and mark-to-market sensitivity. A capital structure dependent on large debt balances limits flexibility to ride out rate moves or credit stress, magnifies downside to book value, and constrains strategic options absent deleveraging.
Read all positive and negative factors
Positive Factors
Negative Factors
Record Mortgage Banking Volume
Sustained, record mortgage banking volumes indicate scalable core platform demand and higher fee generation potential. High throughput (loans on balance sheet ~35 days) supports rapid capital turns, durable operating leverage, and recurring gain-on-sale revenues that should persist if platform execution continues.
Read all positive factors
Redwood (RWT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$713.72M
Dividend Yield13.13%
Average Volume (3M)1.53M
Price to Earnings (P/E)8.7
Beta (1Y)0.87
Revenue Growth11.39%
EPS Growth-292.43%
CountryUS
Employees283
SectorReal Estate
Sector Strength53
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.13
Shares Outstanding124,994,934
10 Day Avg. Volume1,364,398
30 Day Avg. Volume1,528,868
Financial Highlights & Ratios
PEG Ratio0.03
Price to Book (P/B)0.64
Price to Sales (P/S)3.53
P/FCF Ratio-0.06
Enterprise Value/Market Cap31.88
Enterprise Value/Revenue84.54
Enterprise Value/Gross Profit21.49
Enterprise Value/Ebitda21.37
Forecast
1Y Price Target
$7.00Price Target Upside16.67% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)0.78
Revenue Forecast (FY)$369.97M
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 Portfol...
How the Company Makes Money
Redwood makes money primarily through a combination of (1) net interest income from holding and financing residential mortgage-related assets and (2) fee and gain-on-sale revenues generated by its mortgage banking and securitization activities. Ne...
Redwood Key Performance Indicators (KPIs)
Any
Net Interest Income by Segment
Data provided by:
The Fly
The FlyRedwood Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call conveyed substantial operational and financial progress: record full-year volumes ($23B), strong Q4 execution across Sequoia, Aspire and CoreVest, meaningful operating leverage (volumes outpacing expenses by ~6x), improved profitability (Q4 GAAP profit vs prior quarter loss), and active redeployment of capital into high-return operating platforms. Key challenges remain — an ongoing legacy portfolio wind-down, concentrated remaining legacy loans, reliance on third-party capital and securitization execution, mortgage rate and refinance uncertainty, and increased competition in non-QM. Overall, the positive developments (record volumes, margin expansion, efficiency gains, and improved earnings) materially outweigh the lowlights, resulting in a favorable outlook.Positive Updates
Record Full-Year Production
Full year 2025 mortgage banking volume of $23 billion, the highest in company history.
Negative Updates
Ongoing Legacy Portfolio Wind-Down
Management continues to accelerate wind down of the legacy investment portfolio; while Q4 reductions were meaningful, the portfolio remains concentrated (31 loans with an unpaid principal balance of $309 million) and requires further dispositions and resolutions.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Full-Year Production
Full year 2025 mortgage banking volume of $23 billion, the highest in company history.
Read all positive updates
Company Guidance
Redwood guided that core operating performance should drive consolidated 2026 earnings above its $0.18 per‑share common dividend, enabling retention and reinvestment to fund organic growth, and said it will launch the inaugural Aspire securitization in the coming weeks; management also expects to redeploy capital (over 80% of capital was in core operating/related activities at year‑end 2025, up from 57% in 2024) while continuing the legacy portfolio wind‑down, and expects organizational streamlining to cut annualized back‑office run‑rate costs by roughly $10–15 million in 2026; they pointed to strong volume momentum (January volume of $3.6 billion versus roughly $7 billion in Q4 2025, and $23 billion total mortgage volume in 2025), rapid capital turns (loans on balance sheet ~35 days), and meaningful operating returns and metrics to drive results (Sequoia Q4 locks $5.3B, gain‑on‑sale margins expanded to 127 bps, Sequoia segment net income $43.8M / 29% ROC; Aspire Q4 locks $1.5B and 2025 locks >$3B; CoreVest 2025 volumes +13% with RTL ~40% of Q4), plus upside sensitivity if jumbo rates fall (management estimates $200–300 billion of jumbo loans could become refinanceable modestly below 6%).Redwood Financial Statement Overview
Summary
Income Statement
34
Negative
Balance Sheet
18
Very Negative
Cash Flow
9
Very Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.11B | 242.50M | 158.60M | -22.10M | 539.60M |
| Gross Profit | 1.06B | 208.91M | 136.86M | -41.82M | 517.62M |
| EBITDA | 1.07B | 0.00 | 0.00 | 398.85M | 800.74M |
| Net Income | -70.03M | 54.00M | -2.27M | -163.52M | 319.61M |
Balance Sheet | |||||
| Total Assets | 23.70B | 18.26B | 14.50B | 13.03B | 14.71B |
| Cash, Cash Equivalents and Short-Term Investments | 678.68M | 456.64M | 380.48M | 391.04M | 657.28M |
| Total Debt | 22.29B | 16.39B | 12.84B | 11.50B | 12.88B |
| Total Liabilities | 22.72B | 17.07B | 13.30B | 11.95B | 13.32B |
| Stockholders Equity | 982.62M | 1.19B | 1.20B | 1.08B | 1.39B |
Cash Flow | |||||
| Free Cash Flow | -10.09B | -5.86B | -2.02B | -139.14M | -5.69B |
| Operating Cash Flow | -10.09B | -5.86B | -2.02B | -139.14M | -5.69B |
| Investing Cash Flow | 4.53B | 2.54B | 908.72M | 213.89M | 1.40B |
| Financing Cash Flow | 5.70B | 3.27B | 1.15B | -276.87M | 4.28B |
Redwood Technical Analysis
Positive
6.00
Price Trends
5.75
Positive
5.55
Positive
5.43
Positive
Market Momentum
0.10
Negative
60.49
Neutral
76.76
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 6 is above the 20-day moving average (MA) of 5.66, above the 50-day MA of 5.75, and above the 200-day MA of 5.43, indicating a bullish trend. The MACD of 0.10 indicates Negative momentum. The RSI at 60.49 is Neutral, neither overbought nor oversold. The STOCH value of 76.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RWT.
Redwood Risk Analysis
Redwood disclosed 55 risk factors in its most recent earnings report. Redwood reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Redwood Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $1.04B | 5.46 | 9.66% | 14.90% | -17.08% | 57.97% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
59 Neutral | $655.04M | 11.32 | 5.52% | 10.48% | -5.45% | -23.46% | |
59 Neutral | $740.03M | 9.99 | 5.60% | 13.31% | 0.58% | -20.40% | |
51 Neutral | $302.95M | -1.57 | -12.90% | 26.82% | -45.86% | 45.59% | |
50 Neutral | $388.82M | -1.76 | -3.80% | 11.33% | -20.03% | -1249.19% | |
48 Neutral | $713.72M | 8.73 | -5.86% | 13.13% | 11.39% | -292.43% |
* Real Estate Sector Average
RWT
Redwood
5.75
0.39
7.24%
MFA
MFA Financial
10.35
2.01
24.06%
RC
Ready Capital
1.87
-2.39
-56.08%
KREF
Kkr Real Estate Finance
5.88
-2.09
-26.19%
TRTX
Tpg Re Finance
8.44
1.83
27.78%
FBRT
Franklin BSP Realty Trust
9.12
-1.17
-11.37%
Redwood Corporate Events
Dividends
Redwood Declares Consistent First-Quarter 2026 Dividends
Positive
Mar 12, 2026
Redwood Trust, Inc., a specialty housing finance REIT traded on the NYSE under ticker RWT, operates across multiple platforms to provide liquidity and customized housing credit investments to underserved segments of the U.S. mortgage and rental ma...
Business Operations and StrategyStock BuybackFinancial Disclosures
Redwood Trust Reports Record 2025 Mortgage Banking Results
Positive
Feb 11, 2026
On February 11, 2026, Redwood Trust reported fourth-quarter and full-year 2025 results showing record mortgage banking platform performance and strong earnings momentum despite a muted housing backdrop. For the quarter ended December 31, 2025, mor...
Dividends
Redwood Trust Details Expected 2025 Dividend Tax Treatment
Neutral
Jan 29, 2026
On January 29, 2026, Redwood Trust, Inc. announced its expected federal income tax characterization of dividend distributions attributable to the 2025 tax year for both common and preferred shareholders. For 2025, common stock dividends totaling $...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.