Starwood Property (STWD) AI Stock Analysis

• Market Cap: $7.27B
• Dividend Yield: 9.71%
• Average Volume (3M): 4.37M
• Price to Earnings (P/E): 20.6
• Beta (1Y): 0.80
• Revenue Growth: -15.62%
• EPS Growth: -31.74%
• Country: US
• Employees: 286
• Sector: Real Estate
• Sector Strength: 59
• Industry: REIT - Mortgage
• EPS (TTM): 0.43
• Shares Outstanding: 370,964,600
• 10 Day Avg. Volume: 3,694,998
• 30 Day Avg. Volume: 4,374,584
• PEG Ratio: 3.00
• Price to Book (P/B): 0.94
• Price to Sales (P/S): 3.11
• P/FCF Ratio: 9.80
• Enterprise Value/Market Cap: 3.45
• Enterprise Value/Revenue: 13.03
• Enterprise Value/Gross Profit: 19.59
• Enterprise Value/Ebitda: 20.86
• 1Y Price Target: $21.86
• Price Target Upside: 10.52% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 66 Neutral
• Price Target: $21.50 ▲(8.70% Upside)

Starwood Property Trust's overall score reflects solid financial performance with strong cash flow and attractive dividends. However, high leverage and market uncertainties pose risks. The recent stock offering and strategic investments are positive, but technical indicators suggest caution in the short term.

Positive Factors

Dividend Yield

Shares offer an attractive 9% dividend yield.

Earnings

Distributable EPS is expected to be above consensus forecasts, indicating strong earnings performance.

Portfolio Diversification

The acquired portfolio is highly diversified and consists of 467 properties across 44 states, 56 industries, and 92 tenants.

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.

Price Objective

The price objective was lowered to reflect the reduced 2025 earnings outlook and modest industry multiple contraction.

Starwood Property Business Overview & Revenue Model

Company Description

Starwood Property Trust, Inc. operates as a real estate investment trust (REIT) in the United States, Europe, and Australia. It operates through four segments: Commercial and Residential Lending, Infrastructure Lending, Property, and Investing and Servicing segments. The Commercial and Residential Lending segment originates, acquires, finances, and manages commercial first mortgages, non-agency residential mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), and residential mortgage-backed securities, as well as other real estate and real estate-related debt investments, including distressed or non-performing loans. The Infrastructure lending segment originates, acquires, finances, and manages infrastructure debt investments. The Property segment engages primarily in acquiring and managing equity interests in stabilized commercial real estate properties, such as multifamily properties and commercial properties subject to net leases, that are held for investment. The Investing and Servicing segment manages and works out problem assets; acquires and manages unrated, investment grade, and non-investment grade rated CMBS comprising subordinated interests of securitization and re-securitization transactions; originates conduit loans for the primary purpose of selling these loans into securitization transactions; and acquires commercial real estate assets that include properties acquired from CMBS trusts. The company qualifies as a REIT for federal income tax purposes and would not be subject to federal corporate income taxes, if it distributes at least 90% of its taxable income to its stockholders. Starwood Property Trust, Inc. was incorporated in 2009 and is headquartered in Greenwich, Connecticut.

How the Company Makes Money

Starwood Property Trust makes money through several key revenue streams primarily centered around real estate finance. The company earns income by providing loans secured by commercial and residential properties, collecting interest income on these loans. Additionally, the company generates revenue through its property ownership segment, which involves rental income from owned real estate properties. In its infrastructure lending segment, Starwood Property Trust provides financing for infrastructure projects, earning interest and fees. The company also engages in investing and servicing activities, which involve purchasing distressed or non-performing loans at a discount and working to recover value through restructuring or foreclosure, generating gains from these activities. Partnerships with borrowers, real estate developers, and other financial institutions enhance its ability to source and manage investment opportunities, contributing to its earnings.

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	1.92B	1.95B	1.02B	1.45B	885.14M	822.44M
Gross Profit	1.28B	1.95B	777.18M	1.41B	773.48M	704.76M
EBITDA	1.20B	1.80B	54.24M	1.55B	0.00	0.00
Net Income	317.86M	359.93M	339.21M	871.48M	447.74M	331.69M
Balance Sheet
Total Assets	62.16B	62.56B	69.50B	79.04B	83.85B	80.87B
Cash, Cash Equivalents and Short-Term Investments	532.52M	911.09M	258.10M	18.66B	217.36M	563.22M
Total Debt	8.97B	9.01B	8.87B	21.83B	17.02B	7.00B
Total Liabilities	55.01B	55.36B	62.48B	71.84B	77.20B	76.01B
Stockholders Equity	6.41B	6.44B	6.25B	6.46B	6.07B	4.49B
Cash Flow
Free Cash Flow	801.40M	618.65M	503.51M	188.52M	-1.02B	1.02B
Operating Cash Flow	829.50M	646.59M	528.60M	213.74M	-989.98M	1.05B
Investing Cash Flow	11.84M	2.08B	855.07M	-2.95B	-4.28B	-911.80M
Financing Cash Flow	-600.56M	-2.49B	-1.45B	2.80B	4.87B	13.28M

Starwood Property Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 19.78
• 50DMA: Negative
• 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 STWD, the sentiment is Positive. The current price of 19.78 is below the 20-day moving average (MA) of 19.92, below the 50-day MA of 19.90, and above the 200-day MA of 18.91, indicating a neutral trend. The MACD of -0.14 indicates Positive momentum. The RSI at 48.82 is Neutral, neither overbought nor oversold. The STOCH value of 47.02 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	72 Outperform	$2.27B	13.35	7.09%	13.52%	-17.43%	-37.71%
LADR	71 Outperform	$1.40B	15.68	5.83%	8.33%	-12.51%	7.76%
RITM	68 Neutral	$6.50B	9.48	10.13%	8.20%	26.78%	-19.34%
AGNC	67 Neutral	$10.00B	29.57	3.98%	15.29%	-18.28%	-10.62%
STWD	66 Neutral	$7.27B	20.60	5.73%	9.71%	-15.62%	-31.74%
Sector *	65 Neutral	€2.65B	-3.21	3.48%	6.28%	0.91%	40.79%
BXMT	63 Neutral	$3.20B	―	-0.33%	10.01%	-20.46%	-1436.71%

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.

The most recent analyst rating on (STWD) stock is a Buy with a $20.00 price target. To see the full list of analyst forecasts on Starwood Property stock, see the STWD Stock Forecast page.

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.

The most recent analyst rating on (STWD) stock is a Buy with a $20.50 price target. To see the full list of analyst forecasts on Starwood Property stock, see the STWD Stock Forecast page.