Starwood Property (STWD) AI Stock Analysis

• Market Cap: $6.72B
• Dividend Yield: 10.53%
• Average Volume (3M): 3.29M
• Price to Earnings (P/E): 17.3
• Beta (1Y): 0.58
• Revenue Growth: -13.19%
• EPS Growth: -11.26%
• Country: US
• Employees: 286
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Mortgage
• EPS (TTM): 0.40
• Shares Outstanding: 370,331,330
• 10 Day Avg. Volume: 3,841,293
• 30 Day Avg. Volume: 3,287,944
• PEG Ratio: 3.00
• Price to Book (P/B): 0.94
• Price to Sales (P/S): 2.97
• P/FCF Ratio: 9.80
• Enterprise Value/Market Cap: 2.58
• Enterprise Value/Revenue: 9.48
• Enterprise Value/Gross Profit: 35.32
• Enterprise Value/Ebitda: 41.00
• 1Y Price Target: $21.60
• Price Target Upside: 20.81% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: $19.50 ▲(9.06% Upside)

The score is driven primarily by improving financial momentum and strong free-cash-flow generation, partially offset by leverage and earnings volatility. Technicals are neutral, while valuation is supported by a high dividend yield but pressured by earnings (DE) coming in below the dividend and emerging credit-quality challenges.

Positive Factors

Strong Cash Flow

Robust cash generation relative to earnings indicates strong operational efficiency, providing a buffer against financial volatility.

Diversified Investment Strategy

Diversification across sectors like net lease, commercial, and infrastructure lending reduces risk and supports stable long-term growth.

Infrastructure Lending Growth

Growth in infrastructure lending enhances revenue streams and capitalizes on long-term infrastructure development trends.

Negative Factors

High Leverage

High leverage could strain financial stability, especially if interest rates rise, limiting flexibility and increasing risk.

Credit Quality Challenges

Deteriorating credit quality could lead to foreclosures, impacting asset quality and future earnings potential.

Earnings Below Dividend

Earnings below dividend levels indicate financial pressure, potentially affecting dividend sustainability and investor confidence.

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 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

Improving TTM momentum with ~11% revenue growth and strong operating/free cash flow (~$785M/~$778M) with near 1:1 conversion to net income. Offsets are meaningful leverage (debt-to-equity ~1.62) and a history of volatile margins/earnings, which raises cycle/credit sensitivity.

Income Statement

TTM (Trailing-Twelve-Months) revenue is up ~11%, showing a return to growth after a mostly flat 2024 and a sharp decline in 2023. Profitability is positive with a ~20% net margin in TTM, but margins have been volatile across years (very strong in 2021–2022, then much lower in 2023–2024), suggesting earnings quality/cycle sensitivity. Operating profitability also looks uneven based on the wide swings in operating margin data across periods.

Balance Sheet

Leverage is meaningful: debt-to-equity is ~1.62 in TTM, higher than 2023–2024 but well below the spike seen in 2021–2022. Returns on equity are modest and steady around ~5.6% in TTM, indicating stable but not high profitability relative to the capital base. The balance sheet appears workable, but the upward drift in leverage versus the last two year-ends adds risk if credit conditions tighten.

Cash Flow

Cash generation is a relative strength: TTM operating cash flow (~$785M) and free cash flow (~$778M) are strong and free cash flow is nearly 1:1 with net income, supporting earnings quality. Free cash flow growth is very strong in TTM versus the prior period, and cash flow is materially improved versus the negative cash flow year in 2021. A weakness is that some coverage data is inconsistent/zero in multiple periods, limiting visibility into cash coverage metrics from the provided dataset.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.83B	2.04B	2.05B	1.55B	1.19B	1.14B
Gross Profit	491.61M	352.51M	777.18M	1.41B	604.40M	822.44M
EBITDA	423.51M	0.00	54.24M	1.55B	0.00	0.00
Net Income	366.27M	359.93M	339.21M	871.48M	447.74M	331.69M
Balance Sheet
Total Assets	62.43B	62.56B	69.50B	79.04B	83.85B	80.87B
Cash, Cash Equivalents and Short-Term Investments	390.61M	471.64M	258.10M	374.45M	361.34M	563.22M
Total Debt	11.14B	9.01B	8.87B	9.71B	7.48B	7.00B
Total Liabilities	54.86B	55.36B	62.48B	71.84B	77.20B	76.01B
Stockholders Equity	6.86B	6.44B	6.25B	6.46B	6.07B	4.49B
Cash Flow
Free Cash Flow	777.68M	618.65M	503.51M	188.52M	-1.02B	1.02B
Operating Cash Flow	784.68M	646.59M	528.60M	213.74M	-989.98M	1.05B
Investing Cash Flow	-2.74B	2.08B	855.07M	-2.95B	-4.28B	-911.80M
Financing Cash Flow	1.99B	-2.49B	-1.45B	2.80B	4.87B	13.28M

Starwood Property Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 17.88
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 17.88 is below the 20-day moving average (MA) of 18.34, below the 50-day MA of 18.22, and below the 200-day MA of 18.83, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 47.05 is Neutral, neither overbought nor oversold. The STOCH value of 27.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for STWD.

Starwood Property 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%
AGNC	65 Neutral	$12.41B	17.49	7.94%	13.98%	729.50%	-53.65%
STWD	63 Neutral	$6.72B	17.30	5.34%	10.53%	-13.19%	-11.26%
ABR	63 Neutral	$1.58B	10.33	6.43%	17.27%	-18.13%	-40.87%
BXMT	60 Neutral	$3.23B	30.96	2.88%	9.32%	-18.22%	―
ARR	57 Neutral	$2.11B	407.56	3.75%	16.45%	-27.55%	-97.87%
RITM	56 Neutral	$6.21B	7.73	10.78%	8.95%	-1.07%	47.50%