Redwood Trust, Inc. Fundamental Analysis (NYSE: RWT-PA)
Redwood Trust, Inc. (NYSE: RWT-PA) shows weak financial fundamentals with a PE ratio of -9.26, profit margin of -4.66%, and ROE of -3.46%. The company generates $0.0B in annual revenue with weak year-over-year growth of 2.18%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of -177.4/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze RWT-PA's fundamental strength across five key dimensions:
Efficiency Score
WeakRWT-PA struggles to generate sufficient returns from assets.
Valuation Score
ExcellentRWT-PA trades at attractive valuation levels.
Growth Score
WeakRWT-PA faces weak or negative growth trends.
Financial Health Score
WeakRWT-PA carries high financial risk with limited liquidity.
Profitability Score
WeakRWT-PA struggles to sustain strong margins.
Key Financial Metrics
Is RWT-PA Expensive or Cheap?
P/E Ratio
RWT-PA trades at -9.26 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, RWT-PA's PEG of 0.00 indicates potential undervaluation.
Price to Book
The market values Redwood Trust, Inc. at 0.44 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -44.37 times EBITDA. This is generally considered low.
How Well Does RWT-PA Make Money?
Net Profit Margin
For every $100 in sales, Redwood Trust, Inc. keeps $-4.66 as profit after all expenses.
Operating Margin
Core operations generate 91.61 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-3.46 in profit for every $100 of shareholder equity.
ROA
Redwood Trust, Inc. generates $-0.11 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Redwood Trust, Inc. generates limited operating cash flow of $-322.22M, signaling weaker underlying cash strength.
Free Cash Flow
Redwood Trust, Inc. generates weak or negative free cash flow of $-322.22M, restricting financial flexibility.
FCF Per Share
Each share generates $-115.08 in free cash annually.
FCF Yield
RWT-PA converts -38.35% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
-9.26
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.004
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.44
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.54
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
34.74
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.00
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.03
vs 25 benchmark
ROA
Return on assets percentage
-0.00
vs 25 benchmark
ROCE
Return on capital employed
0.02
vs 25 benchmark
How RWT-PA Stacks Against Its Sector Peers
| Metric | RWT-PA Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | -9.26 | 25.26 | Better (Cheaper) |
| ROE | -3.46% | 722.00% | Weak |
| Net Margin | -4.66% | 2077.00% | Weak |
| Debt/Equity | 34.74 | -37.25 (disorted) | Distorted |
| Current Ratio | 0.00 | 91.70 | Weak Liquidity |
| ROA | -0.11% | 270.00% | Weak |
RWT-PA outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Redwood Trust, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
404.48%
Industry Style: Income, Inflation Hedge, REIT
High GrowthEPS CAGR
89.47%
Industry Style: Income, Inflation Hedge, REIT
High GrowthFCF CAGR
-1646.93%
Industry Style: Income, Inflation Hedge, REIT
Declining