Starwood Property Trust, Inc. Fundamental Analysis
Starwood Property Trust, Inc. (STWD) shows weak financial fundamentals with a PE ratio of 16.24, profit margin of 17.69%, and ROE of 5.25%. The company generates $2.2B in annual revenue with weak year-over-year growth of -7.88%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 13.9/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze STWD's fundamental strength across five key dimensions:
Efficiency Score
WeakSTWD struggles to generate sufficient returns from assets.
Valuation Score
ExcellentSTWD trades at attractive valuation levels.
Growth Score
WeakSTWD faces weak or negative growth trends.
Financial Health Score
WeakSTWD carries high financial risk with limited liquidity.
Profitability Score
ModerateSTWD maintains healthy but balanced margins.
Key Financial Metrics
Is STWD Expensive or Cheap?
P/E Ratio
STWD trades at 16.24 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, STWD's PEG of 1.53 indicates fair valuation.
Price to Book
The market values Starwood Property Trust, Inc. at 0.86 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -9.05 times EBITDA. This is generally considered low.
How Well Does STWD Make Money?
Net Profit Margin
For every $100 in sales, Starwood Property Trust, Inc. keeps $17.69 as profit after all expenses.
Operating Margin
Core operations generate 72.72 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $5.25 in profit for every $100 of shareholder equity.
ROA
Starwood Property Trust, Inc. generates $0.57 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Starwood Property Trust, Inc. generates strong operating cash flow of $916.07M, reflecting robust business health.
Free Cash Flow
Starwood Property Trust, Inc. generates strong free cash flow of $696.08M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.88 in free cash annually.
FCF Yield
STWD converts 10.09% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
16.24
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.53
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.86
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.16
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
3.47
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.08
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.05
vs 25 benchmark
ROA
Return on assets percentage
0.006
vs 25 benchmark
ROCE
Return on capital employed
0.03
vs 25 benchmark
How STWD Stacks Against Its Sector Peers
| Metric | STWD Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 16.24 | 22.83 | Better (Cheaper) |
| ROE | 5.25% | 682.00% | Weak |
| Net Margin | 17.69% | 1961.00% | Weak |
| Debt/Equity | 3.47 | -17.11 (disorted) | Distorted |
| Current Ratio | 0.08 | 23.38 | Weak Liquidity |
| ROA | 0.57% | -757.00% (disorted) | Weak |
STWD outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Starwood Property Trust, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
38.36%
Industry Style: Income, Inflation Hedge, REIT
High GrowthEPS CAGR
3.83%
Industry Style: Income, Inflation Hedge, REIT
GrowingFCF CAGR
-21.73%
Industry Style: Income, Inflation Hedge, REIT
Declining