Redwood Trust, Inc.
- Open
- 4.57
- Day high
- 4.58
- Day low
- 4.51
- Prev close
- 4.62
- Volume
- 223K
- Mkt cap
- $512M
- P/E (TTM)
- —
- EPS (TTM)
- —
- P/B
- 0.5
- P/S
- 0.5
- Yield
- 15.91%
- Per share
- $0.72
Redwood Trust, Inc. (RWT) is a Real Estate company listed on NYSE. The stock is down 23% over the past year. Drillr has 1 published research article covering RWT.
Redwood Trust, Inc. (RWT) financials & analyst ratings
Fundamentals (TTM)
Analyst consensus · 8 analysts
Source: exchange market data + company filings. Figures are trailing-twelve-month or as most recently reported. For informational purposes only — not investment advice.
RWT earnings date, history & EPS estimates
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| Jul 28, 2026 | $0.23 | $0.25 | +8.8% | $79M | -12.2% |
| Apr 29, 2026 | $0.28 | $0.28 | -0.4% | $64M | -24.0% |
| Feb 11, 2026 | $0.22 | $0.33 | +50.0% | $88M | +259.8% |
| Oct 29, 2025 | $0.16 | $0.20 | +25.0% | $61M | +146.7% |
| Jul 30, 2025 | $0.19 | $0.18 | -5.3% | $47M | +57.3% |
| Apr 30, 2025 | $0.17 | $0.14 | -17.6% | $74M | +159.3% |
| Feb 13, 2025 | $0.16 | $0.13 | -18.8% | $35M | +15.3% |
| Aug 1, 2024 | $0.12 | $0.13 | +8.3% | $239M | +708.0% |
| Apr 30, 2024 | $0.08 | $0.08 | +0.0% | $216M | +629.5% |
| Feb 20, 2024 | $0.13 | $0.05 | -61.5% | $198M | +629.0% |
| Jul 27, 2023 | $0.12 | $0.14 | +16.7% | $38M | +24.7% |
| Apr 27, 2023 | $0.13 | $0.11 | -15.4% | $43M | +10.9% |
RWT insider trading activity (SEC Form 4)
| Date | Insider | Type | Shares | Price |
|---|---|---|---|---|
| Jul 1, 2026 | Debora Horvath Ddirector | Grant | 11,739 | $4.87 |
| Jul 1, 2026 | Damon Doneene Kdirector | Option | 4,975 | $4.87 |
| Jul 1, 2026 | KUBICEK GREG Hdirector | Grant | 22,072 | $4.87 |
| Jun 29, 2026 | Debora Horvath Ddirector | Option | 7,259 | $4.73 |
| May 27, 2026 | Debora Horvath Ddirector | Option | 20,729 | $5.28 |
| May 27, 2026 | Falcon Armandodirector | Option | 20,729 | $5.28 |
| May 27, 2026 | Schwartz Faith Adirector | Option | 20,729 | $5.28 |
| May 27, 2026 | HANSEN DOUGLAS Bdirector | Option | 20,729 | $5.28 |
| May 20, 2026 | Damon Doneene Kdirector | Grant | 24,809 | $5.24 |
| May 20, 2026 | KUBICEK GREG Hdirector | Grant | 24,809 | $5.24 |
| May 20, 2026 | Debora Horvath Ddirector | Grant | 24,809 | $5.24 |
| May 20, 2026 | Falcon Armandodirector | Grant | 24,809 | $5.24 |
| May 20, 2026 | HANSEN DOUGLAS Bdirector | Grant | 24,809 | $5.24 |
| May 20, 2026 | Schwartz Faith Adirector | Grant | 24,809 | $5.24 |
| May 1, 2026 | Debora Horvath Ddirector | Option | 25,065 | $5.56 |
Source: RWT SEC Form 4 filings, latest Jul 1, 2026. For informational purposes only — not investment advice.
See the full RWT insider & 13F page →Redwood Trust, Inc. company profile
Overview
Redwood Trust, Inc. (NYSE:RWT) is a specialty finance company that operates as a real estate investment trust (REIT) focused on residential mortgage markets. Founded in 1994 and headquartered in Mill Valley, California, the company went public in 1995. Redwood operates through three main business segments: residential mortgage banking, business purpose mortgage banking, and investment portfolio management. As a REIT, the company is required to distribute at least 90% of its taxable income as dividends to shareholders and benefits from certain tax advantages in exchange for this distribution requirement.
Business
Redwood Trust operates in the mortgage finance industry, serving as an intermediary between mortgage originators and capital markets. The company's business is structured around three primary segments that collectively facilitate the flow of capital into residential real estate markets. The Residential Mortgage Banking segment, operating under the Sequoia brand, functions as a mortgage loan conduit that acquires jumbo residential loans from third-party originators. Jumbo loans are mortgages that exceed the conforming loan limits set by government-sponsored enterprises like Fannie Mae and Freddie Mac, typically serving higher-value properties and affluent borrowers. This segment represented approximately 30-40% of the company's operational focus based on recent earnings, with loan lock volumes reaching $9 billion in 2024. The segment also provides derivative financial instruments to manage interest rate and credit risks associated with these loans. The Business Purpose Mortgage Banking segment operates through the CoreVest platform, which originates and acquires business purpose loans including single-family rental properties and bridge loans. Bridge loans are short-term financing solutions that help real estate investors acquire properties quickly before securing permanent financing. This segment has shown strong growth, with fundings reaching approximately $2 billion annually and targeting a $2.5 billion run rate. The Investment Portfolio segment represents the largest portion of the business by asset allocation, accounting for approximately 84% of allocated capital. This segment invests in mortgage-backed securities retained from the company's own securitization activities, as well as third-party residential mortgage-backed securities, multifamily loan securitizations, and other housing-related investments. The portfolio generates steady cash flows through interest income and principal repayments. Additionally, Redwood has launched the Aspire platform, which focuses on alternative mortgage products including home equity investments and second lien mortgages, targeting $2 billion in volume for 2025.
Revenue model
Redwood Trust generates revenue through multiple complementary business models that capitalize on different aspects of the mortgage finance value chain. The primary revenue streams include loan origination and sale margins from the mortgage banking segments. When Redwood acquires loans from originators and sells them to investors or securitizes them, it captures the spread between the purchase price and sale price. The Sequoia segment has maintained gross margins around 111 basis points, while generating returns on capital ranging from 16% to 30% depending on market conditions. Net interest income represents another significant revenue source, generated from the spread between interest earned on mortgage assets in the investment portfolio and the cost of financing those assets. This segment has shown steady growth, with net interest income increasing to $25 million in recent quarters. Securitization and structuring fees are earned when the company packages loans into mortgage-backed securities. Redwood completed multiple securitizations in 2024, including three Sequoia securitizations totaling $1.5 billion, generating transaction-based income. The company also earns joint venture management fees from partnerships with private credit institutions and other investors, with potential to generate $0.15 of annual earnings available for distribution when fully scaled. Several factors influence Redwood's profitability margins. Interest rate volatility significantly impacts both loan demand and the company's hedging costs, as seen during market disruptions in April 2025. Credit spreads in the mortgage-backed securities market directly affect the profitability of loan sales and securitizations. Competition from banks in the jumbo mortgage market can compress margins, though recent trends show banks reducing their mortgage activities, creating opportunities for Redwood. Housing market conditions, including home price appreciation and inventory levels, affect loan demand and credit performance. Finally, regulatory changes, particularly potential reforms to government-sponsored enterprises or bank capital requirements, could create new opportunities or challenges for the company's business model.
Competitive moat
Redwood Trust operates in a moderately competitive mortgage finance industry with several defensive characteristics, though its moat is not exceptionally strong. The company's primary competitive advantages stem from its specialized expertise and infrastructure in non-agency mortgage markets. Redwood has operated in jumbo mortgage securitization since 1994, developing deep relationships with originators, investors, and rating agencies that are difficult for new entrants to replicate quickly. The company maintains partnerships with over 200 mortgage sellers representing approximately 75% of jumbo originations, providing significant distribution reach. Regulatory and capital requirements create barriers to entry, as mortgage banking and securitization require substantial capital, regulatory approvals, and compliance infrastructure. The company's REIT status provides tax advantages that traditional corporate competitors cannot access, though other REITs can achieve similar benefits. Scale advantages exist in technology platforms, risk management systems, and operational infrastructure. Redwood's established Sequoia securitization program and CoreVest platform represent significant investments that competitors would need to replicate. However, the moat faces several challenges. Large banks remain formidable competitors when they choose to compete aggressively in jumbo lending, possessing greater capital resources and customer relationships. Government-sponsored enterprises could potentially expand their loan limits or programs, reducing the addressable market for non-agency products. Fintech companies and alternative lenders are increasingly entering mortgage markets with technology-driven approaches that could disrupt traditional business models. The company's competitive position appears moderately strong but not impregnable. Recent trends showing banks reducing mortgage activities have created opportunities for market share gains, with Redwood increasing its jumbo market share from 4-5% to 6-7%. However, this advantage could erode if market conditions change or if well-capitalized competitors decide to re-enter aggressively.
Risks & safety
Redwood Trust presents a moderate margin of safety with some concerning leverage metrics but adequate liquidity position. • Liquidity and Cash Position: The company maintains $260 million in cash and short-term investments as of Q1 2025, providing reasonable operational flexibility. Unrestricted cash levels have remained stable around $245-275 million over recent quarters. • Leverage and Debt Concerns: The debt-to-equity ratio of 15.1x is extremely high, reflecting the leveraged nature of REIT operations but raising solvency concerns. Total liabilities of $18.7 billion against $1.2 billion in equity indicate significant financial leverage typical of mortgage REITs but potentially risky during market stress. • Valuation Metrics: Price-to-book ratio of 0.68x suggests the stock trades below book value, potentially indicating market skepticism or value opportunity. Price-to-earnings ratio of 12.5x appears reasonable for a financial services company. The Graham net-net value is deeply negative at -136, reflecting the asset-heavy, leveraged business model. • Cash Flow Dynamics: Operating cash flow of -$1.95 billion appears concerning but reflects the nature of mortgage banking operations where loan acquisitions create temporary negative cash flows before sales generate positive returns. • Credit and Asset Quality: The company has been actively managing legacy bridge loan investments and delinquencies, with management expressing confidence in resolution strategies and improving trends. • Dividend Coverage: Current dividend appears sustainable with earnings available for distribution (EAD) approaching dividend levels, though coverage has been inconsistent across quarters.
Recent development
Over the past few years, Redwood Trust has undergone significant strategic transformation focused on expanding market share and diversifying revenue streams while managing through challenging market conditions. The company has aggressively expanded its bank partnership network, growing from traditional correspondent relationships to over 200 sellers representing 75% of jumbo originations. This expansion helped increase Redwood's jumbo market share from 4-5% to 6-7%, capitalizing on banks' reduced appetite for mortgage lending due to regulatory capital constraints and interest rate risk concerns. Platform diversification has been a key strategic initiative. The launch of the Aspire platform represents entry into alternative mortgage products including home equity investments and second lien mortgages, with management targeting $2 billion in volume for 2025. The CoreVest business purpose lending platform has shown strong growth, expanding from bridge loans to include more term loan products and targeting a $2.5 billion annual run rate. The company has pursued strategic partnerships and joint ventures with private credit institutions to access additional capital and fee income opportunities. These partnerships allow Redwood to originate loans without necessarily holding them on balance sheet, improving capital efficiency and generating management fees. Technology and operational efficiency improvements have been prioritized, with management highlighting AI integration and technology investments to enhance competitive positioning. The company reduced fixed employee compensation by 20% while maintaining operational capacity, demonstrating improved efficiency. Capital management has evolved with the company reducing convertible debt from 65% to 31% of equity, improving the capital structure. Management has also implemented share repurchase programs, with $100 million in authorization, and increased the common dividend twice in 2024, signaling confidence in cash flow generation. The company has been actively managing legacy assets, particularly bridge loan portfolios, with focused efforts on resolution strategies and selective exits from underperforming investments. This portfolio optimization has been ongoing as management works to improve overall asset quality and returns.
RWT company profile · for informational purposes only — not investment advice.
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