Starwood Property (STWD) AI Stock Analysis

• Market Cap: $6.60B
• Dividend Yield: 10.53%
• Average Volume (3M): 3.29M
• Price to Earnings (P/E): 15.5
• Beta (1Y): 0.61
• Revenue Growth: -13.19%
• EPS Growth: -11.26%
• Country: US
• Employees: 286
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Mortgage
• EPS (TTM): 0.42
• Shares Outstanding: 370,581,760
• 10 Day Avg. Volume: 3,296,766
• 30 Day Avg. Volume: 3,293,779
• PEG Ratio: 1.85
• Price to Book (P/B): 0.89
• Price to Sales (P/S): 3.23
• P/FCF Ratio: 6.21
• Enterprise Value/Market Cap: 4.29
• Enterprise Value/Revenue: 14.97
• Enterprise Value/Gross Profit: 26.15
• Enterprise Value/Ebitda: 20.59
• 1Y Price Target: $21.25
• Price Target Upside: 19.31% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 1.83
• Revenue Forecast (FY): $2.05B

• Rating: 64 Neutral
• Price Target: $19.00 ▲(6.68% Upside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 02/25/26

The score is primarily supported by improving cash-flow performance and constructive earnings-call guidance around dividend coverage and deployment, partially offset by volatility/leverage and some data-quality flags in the financials. Technicals are the main near-term drag, with the stock trending below major moving averages and bearish momentum signals. Valuation is moderately supportive mainly due to the high dividend yield, while the P/E is only mid-range.

Positive Factors

Improving Cash Generation

Operating cash flow turned positive after a 2021 outflow and has grown through 2022–2025, with free cash flow rising and closely tracking net income in multiple years. This sustained cash generation strengthens ability to fund dividends, repay or refinance debt, and support new originations.

Scaled Origination & Deployment

Record $12.7B deployment in 2025 and a $30.7B asset base show durable origination capability and scale. Growth in infrastructure and net-lease lending diversifies income sources and creates long-dated cash yield, supporting steady future distributable earnings as pipelines fund.

Strong Liquidity & Capital Markets Execution

Robust capital markets access—$4.4B raised, $11.9B financing available and $1.4B liquidity—reduces funding risk and supports deployment plans. A lower debt-to-undepreciated-equity ratio vs peers and insider ownership (~6%) align incentives and improve resilience during cycles.

Negative Factors

Concentrated Credit Stress

Concentrated nonaccruals and REO totalling over $1.6B create material idiosyncratic risk; resolution timing and recoveries can compress distributable earnings and cash flow for multiple quarters, raising capital and operational execution demands during remediation.

Leverage Profile & Data Anomaly

The firm operates with meaningful mortgage-REIT leverage historically, which is normal for the model, but a reported 'total debt = 0' in the latest filing is a data anomaly. That undermines transparency and makes assessing solvency, covenant headroom and refinancing risk harder for investors.

Revenue & Reporting Volatility

Sharp swings in revenue and margins plus missing or inconsistent operating-profit fields reduce confidence in durable earnings power. This volatility complicates forecasting distributable earnings and dividend sustainability, especially when paired with leverage and episodic reserve builds.

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

Financial statements indicate resilient profitability (positive net income across periods) and improving cash-flow momentum, with generally solid and growing operating cash flow and free cash flow. Offsetting factors include revenue/margin volatility, leverage typical of a mortgage REIT, and data-quality/inconsistency flags (notably around debt and missing operating profit fields) that reduce confidence in the latest-period trend read.

Income Statement

Revenue has been volatile: strong growth in 2022–2023, essentially flat in 2024, and the latest annual period shows a sharp rebound (+65% revenue growth). Net income has remained positive each year, but profitability appears inconsistent, with net margin swinging materially (very high in 2022 vs. mid-to-high teens in 2023–2024). Several operating profit fields (e.g., EBIT/EBITDA and margins) are missing or appear inconsistent across years, which reduces confidence in assessing underlying operating performance and stability.

Balance Sheet

The balance sheet reflects a leveraged mortgage REIT profile: reported debt-to-equity has generally run around ~1.2–1.6x (2020–2024), which is meaningful leverage but not extreme for the industry. Equity has gradually increased over time, supporting the capital base. However, total assets have fluctuated notably, and the latest annual report shows total debt as 0 despite prior years near ~$8.9–$9.7B, suggesting a data anomaly and limiting confidence in the most recent leverage snapshot. Returns on equity were moderate in 2023–2024 (~5–6%) after a stronger 2022, pointing to less efficient profitability in the most recent years.

Cash Flow

Cash generation is generally solid with positive free cash flow in most years, and free cash flow has grown strongly in several periods (including a large increase in the latest annual data). Operating cash flow improved from a significant outflow in 2021 to positive and growing levels in 2022–2025, indicating better cash earnings quality and/or working-capital normalization. Free cash flow has also tracked close to net income in years where the comparison is provided (2022–2024), which is supportive. The main weakness is volatility—particularly the large negative operating/free cash flow in 2021—plus some coverage/ratio fields reported as zero in multiple years, limiting interpretability.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.88B	2.04B	2.05B	1.55B	1.19B
Gross Profit	1.51B	352.51M	777.18M	1.41B	604.40M
EBITDA	1.84B	0.00	54.24M	1.55B	0.00
Net Income	411.54M	359.93M	339.21M	871.48M	447.74M
Balance Sheet
Total Assets	63.18B	62.56B	69.50B	79.04B	83.85B
Cash, Cash Equivalents and Short-Term Investments	800.48M	471.64M	258.10M	374.45M	361.34M
Total Debt	22.20B	9.01B	8.87B	9.71B	7.48B
Total Liabilities	55.69B	55.36B	62.48B	71.84B	77.20B
Stockholders Equity	6.80B	6.44B	6.25B	6.46B	6.07B
Cash Flow
Free Cash Flow	977.85M	618.65M	503.51M	188.52M	-1.02B
Operating Cash Flow	977.85M	646.59M	528.60M	213.74M	-989.98M
Investing Cash Flow	-3.41B	2.08B	855.07M	-2.95B	-4.28B
Financing Cash Flow	2.91B	-2.49B	-1.45B	2.80B	4.87B

Starwood Property Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 17.81
• 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 17.81 is below the 20-day moving average (MA) of 18.02, below the 50-day MA of 18.20, and below the 200-day MA of 18.86, indicating a bearish trend. The MACD of -0.10 indicates Positive momentum. The RSI at 44.06 is Neutral, neither overbought nor oversold. The STOCH value of 50.37 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%
STWD	64 Neutral	$6.60B	15.49	6.08%	10.53%	-13.19%	-11.26%
AGNC	61 Neutral	$12.43B	7.60	15.08%	13.98%	729.50%	-53.65%
ARR	57 Neutral	$2.14B	5.45	17.82%	15.06%	-27.55%	-97.87%
ABR	56 Neutral	$1.55B	14.28	4.98%	17.27%	-18.13%	-40.87%
BXMT	55 Neutral	$3.24B	29.97	3.01%	9.32%	-18.22%	―
RITM	55 Neutral	$5.59B	9.68	8.24%	8.95%	-1.07%	47.50%