Starwood Property (STWD) AI Stock Analysis

• Market Cap: $7.40B
• Dividend Yield: 9.54%
• Average Volume (3M): 4.57M
• Price to Earnings (P/E): 18.5
• Beta (1Y): 0.79
• Revenue Growth: -15.07%
• EPS Growth: -1.00%
• Country: US
• Employees: 286
• Sector: Real Estate
• Sector Strength: 52
• Industry: REIT - Mortgage
• EPS (TTM): 0.43
• Shares Outstanding: 367,138,700
• 10 Day Avg. Volume: 2,558,000
• 30 Day Avg. Volume: 4,570,748
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 3.60
• Enterprise Value/Revenue: 13.94
• Enterprise Value/Gross Profit: 21.12
• Enterprise Value/Ebitda: 24.55
• 1Y Price Target: $22.17
• Price Target Upside: 10.13% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 69 Neutral
• Price Target: $21.50 ▲(6.81% Upside)

Starwood Property Trust's overall score reflects strong earnings call sentiment and a robust dividend yield, offset by moderate financial performance and technical indicators. The company's strategic initiatives and recent capital raising efforts provide a positive outlook, though high leverage and revenue growth challenges remain.

Positive Factors

Dividend Yield

Shares trade at approximately 1x price-to-book with a dividend yield of 9.8%.

Earnings

The transaction is expected to be accretive to earnings over time after refinancing the existing debt and scaling the portfolio.

Growth and Diversification

The recent $2.2B net lease platform/portfolio acquisition provides another growth channel.

Negative Factors

Earnings Outlook

Lower revenue growth and a realized loss on a Texas office loan have led to a reduced earnings outlook for 2025 and 2026.

Foreclosures

There were two foreclosures of risk-rated 5 loans totaling $140M.

Loan Downgrades

Two loans for $137mm were downgraded to 3-rated from 4-rated.

Starwood Property Business Overview & Revenue Model

Company Description

Starwood Property Trust, Inc. (STWD) is a leading real estate investment trust (REIT) that primarily invests in and manages a diversified portfolio of real estate debt and equity investments. The company operates across various sectors, including commercial, residential, and hospitality properties, with a focus on originating, acquiring, and managing mortgage loans and other real estate-related assets. STWD's core services include providing financing solutions to property owners and developers, as well as investing in real estate properties directly.

How the Company Makes Money

Starwood Property Trust generates revenue primarily through interest income from its mortgage loans and real estate-related investments. The company originates, acquires, and manages a variety of loans, including first mortgages, subordinate mortgages, and mezzanine loans, which typically yield higher returns compared to traditional fixed-income investments. Additionally, STWD earns revenue from property management fees and other ancillary services related to its equity investments in properties. Key partnerships with institutional investors and real estate developers enhance its ability to source attractive investment opportunities, while its focus on high-quality assets and strategic locations contributes to stable cash flows. The company's diversified investment strategy and active asset management approach help mitigate risks and optimize returns, ensuring a steady income stream for its shareholders.

Starwood Property Financial Statement Overview

Summary

Starwood Property demonstrates solid operational efficiency with strong margins, but faces challenges in revenue growth and high leverage. The cash flow position is strong, providing some buffer against financial volatility. Strategic measures may be needed to enhance revenue generation and manage debt levels effectively.

Income Statement

The income statement shows moderate profitability with a gross profit margin of 66.5% and a net profit margin of 16.5% in the TTM period. Revenue has decreased slightly from the previous year by 1.29%, indicating a potential concern in top-line growth. The EBIT and EBITDA margins are strong at 46.6% and 62.5%, respectively, reflecting efficient operations. However, recent net income has declined compared to the previous period.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 1.40, which suggests significant leverage and potential risk if interest rates rise. The equity ratio is low at 10.3%, indicating that the company relies heavily on debt financing. Return on equity (ROE) is 4.96%, showing a moderate return on shareholders' investments. The company's financial stability could be challenged under adverse conditions.

Cash Flow

Cash flow analysis displays a strong operating cash flow to net income ratio of 2.61, suggesting robust cash generation relative to reported earnings. The free cash flow has grown by 29.53% over the last year, highlighting improved cash management. The free cash flow to net income ratio is 2.52, indicating effective conversion of earnings into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.91B	1.95B	1.02B	1.45B	885.14M	822.44M
Gross Profit	1.26B	1.95B	777.18M	1.41B	773.48M	704.76M
EBITDA	1.08B	1.80B	54.24M	1.55B	0.00	0.00
Net Income	367.68M	359.93M	339.21M	871.48M	447.74M	331.69M
Balance Sheet
Total Assets	62.37B	62.56B	69.50B	79.04B	83.85B	80.87B
Cash, Cash Equivalents and Short-Term Investments	762.52M	911.09M	258.10M	18.66B	217.36M	563.22M
Total Debt	0.00	9.01B	8.87B	21.83B	17.02B	7.00B
Total Liabilities	55.20B	55.36B	62.48B	71.84B	77.20B	76.01B
Stockholders Equity	6.42B	6.44B	6.25B	6.46B	6.07B	4.49B
Cash Flow
Free Cash Flow	660.38M	618.65M	503.51M	188.52M	-1.02B	1.02B
Operating Cash Flow	688.89M	646.59M	528.60M	213.74M	-989.98M	1.05B
Investing Cash Flow	-1.21B	2.08B	855.07M	-2.95B	-4.28B	-911.80M
Financing Cash Flow	560.79M	-2.49B	-1.45B	2.80B	4.87B	13.28M

Starwood Property Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 20.13
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STWD, the sentiment is Positive. The current price of 20.13 is above the 20-day moving average (MA) of 19.85, above the 50-day MA of 20.02, and above the 200-day MA of 19.02, indicating a bullish trend. The MACD of 0.06 indicates Negative momentum. The RSI at 54.75 is Neutral, neither overbought nor oversold. The STOCH value of 69.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STWD.

Starwood Property Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ABR	73 Outperform	$2.27B	13.37	7.09%	12.35%	-17.43%	-37.71%
LADR	71 Outperform	$1.47B	16.29	5.83%	8.00%	-13.74%	-11.53%
STWD	69 Neutral	$7.40B	18.53	5.73%	9.54%	-15.07%	-1.00%
RITM	68 Neutral	$6.61B	9.64	10.13%	8.10%	26.69%	9.10%
AGNC	67 Neutral	$10.21B	30.24	3.98%	14.69%	-18.28%	-10.62%
BXMT	63 Neutral	$3.33B	―	-0.33%	9.68%	-19.20%	92.16%
Sector *	53 Neutral	$1.24B	2.96	-5.63%	5.76%	-4.15%	-87.10%

Starwood Property Corporate Events

Starwood Property Completes $501.5 Million Stock Offering

On July 16, 2025, Starwood Property Trust entered into an Underwriting Agreement with BofA Securities and Wells Fargo Securities to issue and sell 25,500,000 shares of common stock, with an option for an additional 3,825,000 shares. The offering, which closed on July 18, 2025, is expected to generate approximately $501.5 million in net proceeds, intended to fund the acquisition of Fundamental Income Properties, LLC, or alternatively, to be used for other corporate purposes such as loan origination or debt repayment.

Starwood Property Announces Major Acquisition Agreement

On July 16, 2025, Starwood Property Trust announced its agreement to acquire Fundamental Income Properties for approximately $2.2 billion, with the transaction expected to close by July 23, 2025. This acquisition is set to enhance Starwood’s position in the net lease market, providing access to a diversified portfolio of 467 properties across 44 states and 56 industries. The move is anticipated to be accretive to distributable earnings and solidifies Starwood’s status as a leading diversified REIT. However, the completion of the acquisition is subject to customary closing conditions, and failure to close could negatively impact the company’s stock price and business operations.