Redwood Trust (RWT)
Market Price (9/2/2026): $4.42 | Market Cap: $554.0 MilSector: Financials | Industry: Mortgage REITs
Redwood Trust (RWT)
Market Price (9/2/2026): $4.42Market Cap: $554.0 MilSector: FinancialsIndustry: Mortgage REITs
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 18%, Dividend Yield is 17%, ERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate, Reflects the premium above risk free assets offered by the investment. is 13% Strong revenue growthRev Chg LTMRevenue Change % Last Twelve Months (LTM) is 99% Valuation becoming less expensiveP/S 6M Chg %Price/Sales change over 6 months. Declining P/S indicates valuation has become less expensive. is -55% Megatrend and thematic driversMegatrends include Digital & Alternative Assets. Themes include Private Credit. | Debt is significantNet D/ENet Debt/Equity. Debt net of cash. Negative indicates net cash. Equity is taken as the Market Capitalization is 4618% Expensive valuation multiplesP/EPrice/Earnings or Price/(Net Income) is 101x Not cash flow generativeCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is -6752%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is -6752% Key risksRWT key risks include [1] a liquidity shortfall that could force asset sales and threaten its REIT status, Show more. |
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 18%, Dividend Yield is 17%, ERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate, Reflects the premium above risk free assets offered by the investment. is 13% |
| Strong revenue growthRev Chg LTMRevenue Change % Last Twelve Months (LTM) is 99% |
| Valuation becoming less expensiveP/S 6M Chg %Price/Sales change over 6 months. Declining P/S indicates valuation has become less expensive. is -55% |
| Megatrend and thematic driversMegatrends include Digital & Alternative Assets. Themes include Private Credit. |
| Debt is significantNet D/ENet Debt/Equity. Debt net of cash. Negative indicates net cash. Equity is taken as the Market Capitalization is 4618% |
| Expensive valuation multiplesP/EPrice/Earnings or Price/(Net Income) is 101x |
| Not cash flow generativeCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is -6752%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is -6752% |
| Key risksRWT key risks include [1] a liquidity shortfall that could force asset sales and threaten its REIT status, Show more. |
Qualitative Assessment
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Updated on 8/1/2026
Redwood Trust (RWT) stock has lost about 10% since 5/31/2026 because of the following key factors:
1. Declining Book Value and Persistent Drag from Legacy Investments.
Redwood Trust reported a preliminary estimate of a modest 1% to 3% decline in GAAP book value at June 30, 2026, from the end of fiscal Q1 2026. This was later confirmed in its fiscal Q2 2026 earnings report, showing a 3% sequential decline in book value to $6.90 per share. Despite profitable core mortgage banking segments, the company's Legacy Investments segment continued to be a notable drag, incurring a loss of $23.098 million in fiscal Q2 2026.
2. Broader Mortgage REIT Sector Weakness and Interest Rate Uncertainty.
The overall mortgage REIT (mREIT) sector experienced a decline during this period, with the industry dropping 1.0% in the week leading up to August 30, 2026, and showing a 7.3% decrease over the past year. This sector-wide weakness was compounded by increased uncertainty and hawkish signals regarding Federal Reserve monetary policy. Fed Chair Kevin Warsh indicated in August 2026 that he would advocate for interest rate hikes, projecting an approximate one percentage point increase over the subsequent year. The U.S. benchmark interest rate was recorded at 3.75% and was expected to reach 4.00% by the end of fiscal Q3 2026, with long-term projections trending towards 4.25% in 2027, creating an unfavorable environment for mREITs.
Show more
Redwood Trust (RWT) stock has lost about 10% since 5/31/2026 because of the following key factors:
1. Declining Book Value and Persistent Drag from Legacy Investments.
Redwood Trust reported a preliminary estimate of a modest 1% to 3% decline in GAAP book value at June 30, 2026, from the end of fiscal Q1 2026. This was later confirmed in its fiscal Q2 2026 earnings report, showing a 3% sequential decline in book value to $6.90 per share. Despite profitable core mortgage banking segments, the company's Legacy Investments segment continued to be a notable drag, incurring a loss of $23.098 million in fiscal Q2 2026.
2. Broader Mortgage REIT Sector Weakness and Interest Rate Uncertainty.
The overall mortgage REIT (mREIT) sector experienced a decline during this period, with the industry dropping 1.0% in the week leading up to August 30, 2026, and showing a 7.3% decrease over the past year. This sector-wide weakness was compounded by increased uncertainty and hawkish signals regarding Federal Reserve monetary policy. Fed Chair Kevin Warsh indicated in August 2026 that he would advocate for interest rate hikes, projecting an approximate one percentage point increase over the subsequent year. The U.S. benchmark interest rate was recorded at 3.75% and was expected to reach 4.00% by the end of fiscal Q3 2026, with long-term projections trending towards 4.25% in 2027, creating an unfavorable environment for mREITs.
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Updated on 8/1/2026
Redwood Trust (RWT) stock has lost about 10% since 5/31/2026 because of the following key factors:
1. Declining Book Value and Persistent Drag from Legacy Investments.
Redwood Trust reported a preliminary estimate of a modest 1% to 3% decline in GAAP book value at June 30, 2026, from the end of fiscal Q1 2026. This was later confirmed in its fiscal Q2 2026 earnings report, showing a 3% sequential decline in book value to $6.90 per share. Despite profitable core mortgage banking segments, the company's Legacy Investments segment continued to be a notable drag, incurring a loss of $23.098 million in fiscal Q2 2026.
2. Broader Mortgage REIT Sector Weakness and Interest Rate Uncertainty.
The overall mortgage REIT (mREIT) sector experienced a decline during this period, with the industry dropping 1.0% in the week leading up to August 30, 2026, and showing a 7.3% decrease over the past year. This sector-wide weakness was compounded by increased uncertainty and hawkish signals regarding Federal Reserve monetary policy. Fed Chair Kevin Warsh indicated in August 2026 that he would advocate for interest rate hikes, projecting an approximate one percentage point increase over the subsequent year. The U.S. benchmark interest rate was recorded at 3.75% and was expected to reach 4.00% by the end of fiscal Q3 2026, with long-term projections trending towards 4.25% in 2027, creating an unfavorable environment for mREITs.
3. Significant Revenue Miss in Fiscal Q2 2026 and Revised Analyst Expectations.
While Redwood Trust surpassed analyst consensus for earnings per share in fiscal Q2 2026, reporting $0.25 against an estimate of $0.23, it experienced a substantial miss on revenue, with reported revenue of $56.01 million falling considerably short of the $89.45 million consensus. This revenue shortfall likely contributed to negative investor sentiment. Concurrently, analyst consensus for Redwood Trust's fiscal year 2026 earnings per share saw a reduction from $0.48 to $0.415, and the revenue forecast for the same period decreased from $359.1 million to $320.2 million.
Show less
Redwood Trust (RWT) stock has lost about 10% since 5/31/2026 because of the following key factors:
1. Declining Book Value and Persistent Drag from Legacy Investments.
Redwood Trust reported a preliminary estimate of a modest 1% to 3% decline in GAAP book value at June 30, 2026, from the end of fiscal Q1 2026. This was later confirmed in its fiscal Q2 2026 earnings report, showing a 3% sequential decline in book value to $6.90 per share. Despite profitable core mortgage banking segments, the company's Legacy Investments segment continued to be a notable drag, incurring a loss of $23.098 million in fiscal Q2 2026.
2. Broader Mortgage REIT Sector Weakness and Interest Rate Uncertainty.
The overall mortgage REIT (mREIT) sector experienced a decline during this period, with the industry dropping 1.0% in the week leading up to August 30, 2026, and showing a 7.3% decrease over the past year. This sector-wide weakness was compounded by increased uncertainty and hawkish signals regarding Federal Reserve monetary policy. Fed Chair Kevin Warsh indicated in August 2026 that he would advocate for interest rate hikes, projecting an approximate one percentage point increase over the subsequent year. The U.S. benchmark interest rate was recorded at 3.75% and was expected to reach 4.00% by the end of fiscal Q3 2026, with long-term projections trending towards 4.25% in 2027, creating an unfavorable environment for mREITs.
3. Significant Revenue Miss in Fiscal Q2 2026 and Revised Analyst Expectations.
While Redwood Trust surpassed analyst consensus for earnings per share in fiscal Q2 2026, reporting $0.25 against an estimate of $0.23, it experienced a substantial miss on revenue, with reported revenue of $56.01 million falling considerably short of the $89.45 million consensus. This revenue shortfall likely contributed to negative investor sentiment. Concurrently, analyst consensus for Redwood Trust's fiscal year 2026 earnings per share saw a reduction from $0.48 to $0.415, and the revenue forecast for the same period decreased from $359.1 million to $320.2 million.
Show less
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Stock Movement Drivers
Fundamental Drivers
The -11.6% change in RWT stock from 5/31/2026 to 8/31/2026 was primarily driven by a -51.4% change in the company's P/S Multiple.| (LTM values as of) | 5312026 | 8312026 | Change |
|---|---|---|---|
| Stock Price ($) | 5.22 | 4.62 | -11.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 116 | 212 | 82.9% |
| P/S Multiple | 5.6 | 2.7 | -51.4% |
| Shares Outstanding (Mil) | 125 | 125 | -0.5% |
| Cumulative Contribution | -11.6% |
Market Drivers
5/31/2026 to 8/31/2026| Return | Correlation | |
|---|---|---|
| RWT | -11.6% | |
| Market (SPY) | 1.4% | 24.3% |
| Sector (XLF) | 11.9% | 14.4% |
Fundamental Drivers
The -18.1% change in RWT stock from 2/28/2026 to 8/31/2026 was primarily driven by a -49.7% change in the company's P/S Multiple.| (LTM values as of) | 2282026 | 8312026 | Change |
|---|---|---|---|
| Stock Price ($) | 5.64 | 4.62 | -18.1% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 131 | 212 | 61.5% |
| P/S Multiple | 5.4 | 2.7 | -49.7% |
| Shares Outstanding (Mil) | 126 | 125 | 0.7% |
| Cumulative Contribution | -18.1% |
Market Drivers
2/28/2026 to 8/31/2026| Return | Correlation | |
|---|---|---|
| RWT | -18.1% | |
| Market (SPY) | 12.1% | 40.8% |
| Sector (XLF) | 12.8% | 28.0% |
Fundamental Drivers
The -13.8% change in RWT stock from 8/31/2025 to 8/31/2026 was primarily driven by a -59.1% change in the company's P/S Multiple.| (LTM values as of) | 8312025 | 8312026 | Change |
|---|---|---|---|
| Stock Price ($) | 5.36 | 4.62 | -13.8% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 107 | 212 | 98.5% |
| P/S Multiple | 6.7 | 2.7 | -59.1% |
| Shares Outstanding (Mil) | 133 | 125 | 6.1% |
| Cumulative Contribution | -13.8% |
Market Drivers
8/31/2025 to 8/31/2026| Return | Correlation | |
|---|---|---|
| RWT | -13.8% | |
| Market (SPY) | 19.9% | 21.4% |
| Sector (XLF) | 8.2% | 15.2% |
Fundamental Drivers
The -19.2% change in RWT stock from 8/31/2023 to 8/31/2026 was primarily driven by a -72.9% change in the company's P/S Multiple.| (LTM values as of) | 8312023 | 8312026 | Change |
|---|---|---|---|
| Stock Price ($) | 5.71 | 4.62 | -19.2% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 64 | 212 | 228.2% |
| P/S Multiple | 10.1 | 2.7 | -72.9% |
| Shares Outstanding (Mil) | 114 | 125 | -9.0% |
| Cumulative Contribution | -19.2% |
Market Drivers
8/31/2023 to 8/31/2026| Return | Correlation | |
|---|---|---|
| RWT | -19.2% | |
| Market (SPY) | 76.3% | 41.5% |
| Sector (XLF) | 75.4% | 40.0% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| RWT Return | 60% | -42% | 22% | -3% | -4% | -10% | -6% |
| Peers Return | 14% | -19% | 25% | 4% | 21% | -2% | 43% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 13% | 105% |
Monthly Win Rates [3] | |||||||
| RWT Win Rate | 75% | 42% | 50% | 50% | 58% | 25% | |
| Peers Win Rate | 53% | 48% | 55% | 58% | 63% | 48% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 50% | |
Max Drawdowns [4] | |||||||
| RWT Max Drawdown | -11% | -54% | -34% | -24% | -24% | -28% | |
| Peers Max Drawdown | -15% | -38% | -28% | -11% | -18% | -20% | |
| S&P 500 Max Drawdown | -5% | -25% | -10% | -8% | -19% | -9% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: RITM, STWD, NLY, AGNC, PMT.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 8/31/2026 (YTD)
How Low Can It Go
| Event | RWT | S&P 500 |
|---|---|---|
| 2025 US Tariff Shock | ||
| % Loss | -20.3% | -18.8% |
| % Gain to Breakeven | 25.4% | 23.1% |
| Time to Breakeven | 21 days | 79 days |
| 2023 SVB Regional Banking Crisis | ||
| % Loss | -28.7% | -6.7% |
| % Gain to Breakeven | 40.3% | 7.1% |
| Time to Breakeven | 92 days | 31 days |
| 2015-2016 China Devaluation / Global Growth Scare | ||
| % Loss | -36.1% | -12.2% |
| % Gain to Breakeven | 56.5% | 13.9% |
| Time to Breakeven | 111 days | 62 days |
| 2014-2016 Oil Price Collapse | ||
| % Loss | -46.4% | -6.8% |
| % Gain to Breakeven | 86.6% | 7.3% |
| Time to Breakeven | 365 days | 15 days |
| 2013 Taper Tantrum | ||
| % Loss | -26.1% | -0.2% |
| % Gain to Breakeven | 35.3% | 0.2% |
| Time to Breakeven | 277 days | 1 days |
| 2011 US Debt Ceiling Crisis & European Contagion | ||
| % Loss | -30.0% | -17.9% |
| % Gain to Breakeven | 42.9% | 21.8% |
| Time to Breakeven | 319 days | 123 days |
In The Past
Redwood Trust's stock fell -20.3% during the 2025 US Tariff Shock. Such a loss loss requires a 25.4% gain to breakeven.
Preserve Wealth
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Asset Allocation
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| Event | RWT | S&P 500 |
|---|---|---|
| 2025 US Tariff Shock | ||
| % Loss | -20.3% | -18.8% |
| % Gain to Breakeven | 25.4% | 23.1% |
| Time to Breakeven | 21 days | 79 days |
| 2023 SVB Regional Banking Crisis | ||
| % Loss | -28.7% | -6.7% |
| % Gain to Breakeven | 40.3% | 7.1% |
| Time to Breakeven | 92 days | 31 days |
| 2015-2016 China Devaluation / Global Growth Scare | ||
| % Loss | -36.1% | -12.2% |
| % Gain to Breakeven | 56.5% | 13.9% |
| Time to Breakeven | 111 days | 62 days |
| 2014-2016 Oil Price Collapse | ||
| % Loss | -46.4% | -6.8% |
| % Gain to Breakeven | 86.6% | 7.3% |
| Time to Breakeven | 365 days | 15 days |
| 2013 Taper Tantrum | ||
| % Loss | -26.1% | -0.2% |
| % Gain to Breakeven | 35.3% | 0.2% |
| Time to Breakeven | 277 days | 1 days |
| 2011 US Debt Ceiling Crisis & European Contagion | ||
| % Loss | -30.0% | -17.9% |
| % Gain to Breakeven | 42.9% | 21.8% |
| Time to Breakeven | 319 days | 123 days |
| 2008-2009 Global Financial Crisis | ||
| % Loss | -70.7% | -53.4% |
| % Gain to Breakeven | 240.8% | 114.4% |
| Time to Breakeven | 1575 days | 1085 days |
| Summer 2007 Credit Crunch | ||
| % Loss | -38.4% | -8.6% |
| % Gain to Breakeven | 62.3% | 9.5% |
| Time to Breakeven | 185 days | 47 days |
In The Past
Redwood Trust's stock fell -20.3% during the 2025 US Tariff Shock. Such a loss loss requires a 25.4% gain to breakeven.
Preserve Wealth
Limiting losses and compounding gains is essential to preserving wealth.
Asset Allocation
Actively managed asset allocation strategies protect wealth. Learn more.
About Redwood Trust (RWT)
Redwood Trust (RWT) is a specialty finance company operating as a real estate investment trust (REIT) focused on the U.S. housing market. The company primarily engages in mortgage banking activities, which involve acquiring and originating various types of residential and business purpose mortgage loans. These loans are then either sold, securitized into investment products, or retained within Redwood Trust's own investment portfolio.
The company's operations are divided into three key segments. Its Residential Mortgage Banking segment sources conventional residential loans from third-party originators, while its Business Purpose Mortgage Banking segment originates specialized loans for real estate investors, such as single-family rental and bridge loans. Both segments prepare these loans for onward sale, securitization, or internal investment, utilizing derivatives to manage associated market risks.
Redwood Trust's Investment Portfolio segment serves as a key component of its strategy, holding a diverse range of housing-related debt. This includes securities retained from its own securitization activities, direct investments in residential and small-balance multifamily bridge loans, and third-party mortgage-backed securities. As a REIT, Redwood Trust aims to distribute a significant portion of its taxable income as dividends to shareholders, offering investors exposure to the U.S. housing finance sector.
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Here are a few analogies for Redwood Trust (RWT):
- It's like a Fannie Mae or Freddie Mac, but focused on acquiring, packaging, and investing in a broader range of residential and business-purpose mortgages, rather than just standard conforming loans.
- Imagine an investment bank solely dedicated to the mortgage market, originating, securitizing, and investing in various types of real estate loans and mortgage-backed securities.
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- Residential Mortgage Banking: Acquiring residential mortgage loans from third-party originators for subsequent sale, securitization, or transfer to its investment portfolio.
- Business Purpose Mortgage Banking: Originating and acquiring business purpose loans, such as single-family rental and bridge loans, for subsequent securitization, sale, or transfer to its investment portfolio.
- Investment Portfolio Management: Investing in a diverse portfolio of housing-related debt and mortgage-backed securities, including those retained from its own securitization activities and those issued by third parties.
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Redwood Trust (RWT) primarily sells its financial products and services to other companies and institutional entities rather than individual consumers for their personal mortgage needs. Its major customer categories include:
- Institutional Investors: These are entities such as asset managers, hedge funds, banks, insurance companies, and pension funds that purchase the mortgage-backed securities (RMBS) and other securitized products (e.g., from business purpose loans) that Redwood Trust issues or sells. They also purchase whole loans from Redwood Trust.
- Real Estate Investment Entities: For its Business Purpose Mortgage Banking segment, Redwood Trust originates and acquires loans for real estate investors, developers, and landlords. These customers borrow funds for single-family rental properties, bridge loans for property acquisition/rehabilitation, and small-balance multifamily properties. These borrowers often operate as companies or professional investment entities.
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Christopher J. Abate, Chief Executive Officer
Mr. Abate has served as Chief Executive Officer of Redwood Trust since May 2018 and as a director since December 2017. He joined Redwood in April 2006, holding previous roles as the company's President from July 2016 to May 2018, Chief Financial Officer from March 2012 to August 2017, and Controller from January 2009 to March 2013. Before joining Redwood, Mr. Abate was employed by PricewaterhouseCoopers LLP. From October 2019 to December 2021, he served as Chair of the Board of Structured Finance Association, and in August 2025, he was named a member of the Board of Directors of Heritage Commerce Corp.
Brooke E. Carillo, Chief Financial Officer and Executive Vice President
Ms. Carillo joined Redwood Trust in May 2021. Prior to her tenure at Redwood, she was employed at Annaly Capital Management, Inc., where she most recently held the position of Head of Corporate Development and Strategy. In this role, Ms. Carillo was responsible for leading corporate strategy, capital markets, and investor relations departments, and she also served on Annaly's Operating Committee. Before joining Annaly in 2010, she worked in investment banking within the Financial Institutions Group at Bank of America Merrill Lynch.
Dashiell I. Robinson, President and Director
Mr. Robinson has served as President of Redwood Trust since December 2017 and as a director since August 2021. He joined Redwood in September 2017 from Wells Fargo Securities, where he was the Head of Mortgage Finance within the Asset-Backed Finance Group. Prior to his employment at Wells Fargo, Mr. Robinson worked within the Structured Credit Products Group at Wachovia Capital Markets from 2001 to 2008, where he held banking, structuring, and risk mitigation roles.
Abhinav Asthana, Chief Technology Officer
Mr. Asthana joined Redwood Trust as Chief Technology Officer in November 2024. He brings nearly two decades of experience in the technology and software industry, having most recently served as Head of Products at Tavant. His career also includes product leadership and engineering positions at Wipro and Hewlett-Packard.
Andrew P. Stone, Executive Vice President, Chief Legal Officer and Secretary
Mr. Stone serves as Executive Vice President, Chief Legal Officer, and Secretary for Redwood Trust.
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Redwood Trust (RWT) faces several significant risks due to its business model as a specialty finance company focused on the U.S. housing market. The primary risks stem from the inherent volatility of the financial and real estate sectors in which it operates.
The three most significant key risks to Redwood Trust's business are:
1. **Interest Rate Risk:** As a company heavily involved in mortgage banking, securitization, and maintaining an investment portfolio of mortgage-backed securities and loans, Redwood Trust is highly susceptible to interest rate fluctuations. Changes in interest rates can directly impact the value of its investment portfolio, particularly its fixed-income assets. Rising interest rates can lead to a decrease in the fair value of existing mortgage-backed securities, higher borrowing costs for the company's short-term credit lines, and potentially reduced demand for new mortgage originations, which are core to its business model. This risk can also lead to mark-to-market losses and affect the company's net interest income.
2. **Real Estate Market Downturn and Credit Risk:** Redwood Trust's profitability and asset values are intrinsically linked to the health of the residential and business-purpose real estate markets. A significant downturn in these markets, characterized by declining property values, increased loan defaults, or slower home price appreciation, could lead to substantial losses on its loan portfolios and securitized investments. The company's focus on non-agency mortgage loans means it bears the credit risk directly, and a rise in delinquency rates would severely impact its returns. Economic slowdowns or recessions are also a macro risk that could contribute to this.
3. **Liquidity and Capital Markets Access Risk:** Redwood Trust relies heavily on securitization and secondary markets to finance its mortgage originations and to manage its balance sheet by selling loans. A decrease in liquidity or disruptions in the secondary market for private-label securitizations could make it difficult for Redwood Trust to sell or securitize loans, leading to loans piling up on its balance sheet and increasing financing costs. This dependence on efficient capital markets for funding and distribution is critical for its operations and ability to recycle capital. A prolonged market disruption could widen credit spreads and negatively affect net interest margin.
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The addressable markets for Redwood Trust's main products and services in the United States are substantial across several key segments.
Residential Mortgage Banking
Redwood Trust operates in the U.S. residential mortgage market. The total U.S. mortgage market, representing outstanding mortgage debt, is approximately $14.5 trillion. More specifically, the U.S. mortgage originations market is projected to reach $2.27 trillion in 2026.
Business Purpose Mortgage Banking
This segment focuses on business purpose loans, including single-family rental (SFR) and bridge loans, primarily within the U.S.
- Single-Family Rental (SFR) Loans: The U.S. single-family rental market has a valuation of well over $4 trillion. There are approximately 15.0 million SFR units in the United States. The number of SFR households is estimated to have reached 14.6 million in 2025.
- Bridge Loans: The U.S. bridging finance market is estimated to be between $30 billion and $40 billion annually. This market is seeing increased activity, partly due to a projected $2 trillion "maturity wall" for commercial real estate borrowers through the end of 2026, leading to a greater reliance on short-term financing solutions like bridge loans.
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Redwood Trust (RWT) is expected to drive future revenue growth over the next 2-3 years through several key initiatives and market tailwinds:
- Expansion and Performance of Mortgage Banking Platforms: Redwood Trust anticipates continued growth in its core mortgage banking platforms, Sequoia, CoreVest, and Aspire. The company exited 2025 with record production and strong margins across its mortgage banking activities. Sequoia, the residential mortgage banking segment, saw a significant increase in loan locks in Q4 2025 compared to the prior year. The Aspire platform, focused on alternative loan products and non-QM loans, is expected to grow significantly, with plans to launch its inaugural securitization platform imminently and target a substantial share of its addressable market. CoreVest, which handles business purpose mortgage banking, has also shown growth, particularly with a shift towards smaller balance products like residential transition loans (RTL) and DSCR loans. These platforms generated a record $23 billion in volume in 2025, the highest in the company's history.
- Strategic Capital Reallocation and Reduced Legacy Asset Exposure: A significant driver of future earnings quality and growth is Redwood Trust's ongoing strategy to redeploy capital from legacy investments into its higher-return mortgage banking and operating segments. By the end of 2025, over 80% of the company's capital was invested in core operating and related activities, an increase from 57% in 2024. The company has actively harvested capital from legacy assets, aiming to reduce its legacy exposure to 20% of total capital by year-end 2025, which frees up capital for reinvestment in its scalable and profitable operating platforms.
- Product Diversification and Niche Market Penetration: Redwood Trust is expanding its product offerings and deepening its penetration in targeted market niches. The Aspire platform has been broadened to include diverse alternative loan products beyond home equity, such as loans verified by bank statements or CPA-prepared profit-and-loss statements, and DSCR loans for housing investors. The company is also scaling its Home Equity Investment (HEI) platform, with multiple HEI securitizations completed in 2025, which helps diversify revenue streams away from interest-rate-sensitive mortgage banking. Furthermore, CoreVest is focusing on the growing build-for-rent (BFR) sector, targeting institutional developers, a segment projected to grow about 15% annually through 2026.
- Operational Efficiencies and Technology Leverage: Enhanced operational efficiencies and the strategic adoption of technology are expected to contribute to revenue growth by improving profitability. In 2025, mortgage banking volumes grew approximately six times faster than total operating expenses, leading to a reduction in the total operating expense as a percentage of production volume. The company achieved a 44% year-over-year decrease in operating cost per loan due to automation and process improvements. Redwood's venture arm, RWT Horizons, invests in fintech and proptech, with adopted tools reducing loan processing times by up to 40% and improving credit risk assessment accuracy through machine learning, further reinforcing operating leverage.
- Favorable Interest Rate Environment and Rebounding Securitization Market: An anticipated environment of lower interest rates is expected to significantly benefit Redwood Trust. Lower rates are projected to enhance mortgage banking income and stimulate demand for whole loan sales. Additionally, the securitization market is showing signs of rebounding from periods of peak interest rate volatility, with deal flow normalizing. This market recovery, coupled with improved credit spreads, could lead to mark-to-market appreciation and further support a positive outlook for the company's investment portfolio and overall financial performance.
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Share Repurchases
- In July 2025, Redwood Trust's Board of Directors increased the common stock repurchase authorization to $150 million, with no specified time limit for the program. The authorization also covers repurchases of preferred stock and corporate debt securities.
- During 2025, the company repurchased 9.2 million shares of common stock for $53 million, contributing an accretion of $0.13 to book value per share.
- The company initiated common stock repurchases in the second quarter of 2025.
Share Issuance
- Shares outstanding at December 31, 2023, were 131,486,000, which was an increase from 113,485,000 at December 31, 2022, indicating share issuance during that period.
- In the fourth quarter of 2023, the net effects of equity issuance, alongside the common dividend, contributed to a decline in book value per share.
Outbound Investments
- Redwood Trust operates a venture investing initiative called RWT Horizons®, which focuses on investing in early-stage companies that have a direct connection to its core operating platforms.
- In the first quarter of 2024, Redwood Trust deployed approximately $115 million into internally sourced and third-party investments, representing the largest quarterly deployment since the third quarter of 2022.
- The company's Investment Portfolio segment strategically invests in a variety of assets, including securities retained from its residential and business purpose securitization activities, as well as residential and small-balance multifamily bridge loans and third-party issued residential mortgage-backed securities.
Capital Expenditures
- Redwood Trust reported $0.00 in capital expenditures for all years from 2015 to 2025.
Peer Outperformance in Mortgage REITs
RWT has trailed 69% of its 32 Mortgage REITs peers over 5Y. Mortgage REITs ranks 16th of 18 industries in Financials by median 5Y return. The sector’s gains have largely come from elsewhere.
Share of Mortgage REITs constituents that RWT has outperformed, by holding period. Peers without a full price history over a given window are excluded from that window.
1Y
36%
of 36 industry peers · -13.8% return
3Y
23%
of 35 industry peers · -21.2% return
5Y
31%
of 32 industry peers · -36.0% return
No Mortgage REITs peer with a comparable growth profile has beaten RWT by more than 20pp over 5Y.
Median price return by industry across the Financials sector, ranked by 5Y. Mortgage REITs is RWT's own industry. Use this to see which corners of the sector have carried the returns.
| Industry | Names | 1Y med | 3Y med | 5Y med | Top 3 by 5Y |
|---|---|---|---|---|---|
| Investment Banking & Brokerage | 13 | 3.9% | 121.3% | 135.2% | IBKR 511% · SNEX 235% · GS 177% |
| Reinsurance | 6 | 20.6% | 80.3% | 122.7% | SPNT 151% · RGA 132% · MTG 127% |
| Diversified Banks | 12 | 35.2% | 125.2% | 114.1% | JPM 153% · CM 150% · RY 138% |
| Life & Health Insurance | 20 | 11.4% | 51.7% | 93.2% | JXN 435% · UNM 311% · FG 213% |
| Regional Banks | 264 | 24.1% | 78.7% | 63.1% | GCBC 365% · ESQ 338% · NBN 284% |
| Property & Casualty Insurance | 42 | 12.3% | 71.8% | 62.5% | ASIC 2626900% · HRTG 418% · UVE 280% |
| Multi-line Insurance | 9 | 12.1% | 75.3% | 56.8% | GNW 167% · L 98% · SLF 88% |
| Multi-Sector Holdings | 6 | 3.4% | 17.1% | 37.9% | BRK-B 77% · JEF 76% · VOYA 73% |
| Consumer Finance | 30 | 7.2% | 76.6% | 34.2% | ENVA 584% · EZPW 375% · AGM 164% |
| Insurance Brokers | 16 | -11.6% | 3.9% | 28.9% | LIFE 565% · AJG 91% · ARX 88% |
| Asset Management & Custody Banks | 82 | -8.6% | 21.6% | 22.6% | SII 337% · WT 310% · VCTR 298% |
| Financial Exchanges & Data | 15 | -0.1% | 19.2% | 16.7% | VIRT 216% · CBOE 152% · CME 77% |
| Diversified Financial Services | 4 | -0.5% | 5.2% | 10.0% | FRHC 172% · EQH 84% · TMS -64% |
| Commercial & Residential Mortgage Finance | 12 | -37.0% | 13.6% | 3.0% | FNMA 512% · FMCC 499% · ESNT 60% |
| Specialized Finance | 3 | 16.5% | 45.9% | 1.6% | EFC 35% · CACC 2% · HASI -18% |
| Mortgage REITs ← | 33 | -9.5% | 9.4% | -15.6% | NREF 53% · RITM 50% · DX 39% |
| Transaction & Payment Processing Services | 15 | 2.3% | 0.2% | -41.2% | MA 74% · V 71% · CPAY 53% |
| Diversified Capital Markets | 21 | -23.7% | 4.2% | -48.0% | BTCS 589% · OPY 179% · LPLA 154% |
Median of constituents with a full price history over each window. Top names are unfiltered by size in this render.
Latest Trefis Analyses
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Research & Analysis
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Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | - |
| Mkt Cap | 5.7 |
| Rev LTM | 1,606 |
| Op Inc LTM | - |
| FCF LTM | -1,100 |
| FCF 3Y Avg | -436 |
| CFO LTM | -498 |
| CFO 3Y Avg | -413 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 69.8% |
| Rev Chg 3Y Avg | 48.9% |
| Rev Chg Q | 100.5% |
| QoQ Delta Rev Chg LTM | 18.0% |
| Op Inc Chg LTM | - |
| Op Inc Chg 3Y Avg | - |
| Op Mgn LTM | - |
| Op Mgn 3Y Avg | - |
| QoQ Delta Op Mgn LTM | - |
| CFO/Rev LTM | -14.2% |
| CFO/Rev 3Y Avg | -43.5% |
| FCF/Rev LTM | -33.2% |
| FCF/Rev 3Y Avg | -45.3% |
Segment Financials
Revenue by Segment| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Sequoia | 198 | 101 | 30 | -9 | 149 |
| Redwood Investments | 97 | 157 | 143 | 12 | 313 |
| CoreVest | 76 | 58 | 48 | 22 | 116 |
| Corporate/ Other | -64 | -71 | -55 | -32 | -37 |
| Legacy Investments | -131 | 12 | -0 | ||
| Total | 177 | 257 | 166 | -7 | 542 |
| $ Mil | 2015 | 2014 |
|---|---|---|
| Commercial Mortgage Banking and Investments | 0 | 0 |
| Corporate/ Other | 0 | 0 |
| Residential Investments | 0 | 0 |
| Sequoia | 0 | 0 |
| Total | 0 | 0 |
| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Sequoia | 126 | 61 | 10 | -22 | 82 |
| Redwood Investments | 68 | 133 | 121 | -10 | 293 |
| CoreVest | 20 | 2 | -13 | -44 | 39 |
| Corporate/ Other | -137 | -139 | -111 | -88 | -95 |
| Legacy Investments | -147 | -4 | -9 | ||
| Total | -70 | 54 | -2 | -164 | 320 |
| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Redwood Investments | 18,745 | 13,278 | 9,450 | 11,490 | 11,770 |
| Sequoia | 3,321 | 1,232 | 972 | 661 | 1,716 |
| Legacy Investments | 942 | 3,101 | 3,409 | ||
| CoreVest | 358 | 318 | 293 | 487 | 465 |
| Corporate/ Other | 335 | 330 | 381 | 393 | 755 |
| Total | 23,701 | 18,258 | 14,504 | 13,031 | 14,707 |
Price Behavior
Price Behavior
| Market Price | $4.62 | |
| Market Cap ($ Bil) | 0.6 | |
| First Trading Date | 08/04/1995 | |
| Distance from 52W High | -25.8% | |
| 50 Days | 200 Days | |
| DMA Price | $4.79 | $5.15 |
| DMA Trend | indeterminate | down |
| Distance from DMA | -3.5% | -10.4% |
| 3M | 1YR | |
| Volatility | 34.2% | 36.8% |
| Downside Capture | 96.18 | 76.44 |
| Upside Capture | 41.00 | 42.91 |
| Correlation (SPY) | 23.8% | 21.4% |
RWT Betas & Captures as of 8/31/2026
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | 1.28 | 0.91 | 0.60 | 0.94 | 0.63 | 0.91 |
| Up Beta | 1.02 | 1.22 | 1.06 | 1.19 | 1.17 | 1.00 |
| Down Beta | 0.03 | 0.21 | 0.11 | 0.81 | 0.24 | 0.83 |
| Up Capture | 135% | 80% | 29% | 50% | 33% | 48% |
| Bmk +ve Days | 10 | 21 | 32 | 68 | 138 | 427 |
| Stock +ve Days | 10 | 22 | 32 | 63 | 117 | 363 |
| Down Capture | 196% | 114% | 97% | 122% | 82% | 101% |
| Bmk -ve Days | 11 | 21 | 32 | 59 | 113 | 324 |
| Stock -ve Days | 10 | 19 | 29 | 58 | 123 | 359 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with RWT | |
|---|---|---|---|---|
| RWT | -12.4% | 36.8% | -0.30 | - |
| Sector ETF (XLF) | 8.5% | 14.5% | 0.34 | 15.6% |
| Equity (SPY) | 19.3% | 12.8% | 1.11 | 21.4% |
| Gold (GLD) | 29.8% | 29.0% | 0.89 | 11.0% |
| Commodities (DBC) | 41.3% | 20.4% | 1.58 | -18.1% |
| Real Estate (VNQ) | 9.2% | 13.7% | 0.40 | 35.6% |
| Bitcoin (BTCUSD) | -30.9% | 43.7% | -0.72 | 10.0% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with RWT | |
|---|---|---|---|---|
| RWT | -8.2% | 35.4% | -0.17 | - |
| Sector ETF (XLF) | 10.5% | 18.4% | 0.43 | 45.8% |
| Equity (SPY) | 12.9% | 17.2% | 0.57 | 48.9% |
| Gold (GLD) | 19.4% | 18.7% | 0.84 | 14.3% |
| Commodities (DBC) | 11.0% | 19.5% | 0.44 | 7.9% |
| Real Estate (VNQ) | 1.9% | 18.9% | -0.00 | 56.7% |
| Bitcoin (BTCUSD) | 9.5% | 52.7% | 0.36 | 21.4% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with RWT | |
|---|---|---|---|---|
| RWT | -2.2% | 49.2% | 0.14 | - |
| Sector ETF (XLF) | 13.5% | 22.1% | 0.56 | 38.0% |
| Equity (SPY) | 15.2% | 17.9% | 0.72 | 35.8% |
| Gold (GLD) | 12.3% | 16.3% | 0.62 | 1.8% |
| Commodities (DBC) | 7.6% | 18.1% | 0.34 | 11.3% |
| Real Estate (VNQ) | 4.9% | 20.7% | 0.20 | 46.0% |
| Bitcoin (BTCUSD) | 63.4% | 66.2% | 1.03 | 10.0% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Returns Analyses
Earnings Returns History
Updated 8/28/2026| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 7/28/2026 | -5.5% | -6.5% | -4.5% |
| 4/29/2026 | -0.9% | -0.7% | -3.4% |
| 2/11/2026 | 20.6% | 13.0% | 5.2% |
| 10/29/2025 | -2.7% | -4.4% | 1.6% |
| 7/30/2025 | -7.9% | -6.4% | -1.2% |
| 4/30/2025 | -6.1% | -6.0% | -12.2% |
| 2/13/2025 | -1.2% | -0.3% | -1.2% |
| 10/30/2024 | -4.2% | -6.8% | -6.3% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 8 | 6 | 12 |
| # Negative | 17 | 19 | 13 |
| Median Positive | 6.4% | 9.1% | 4.9% |
| Median Negative | -2.8% | -4.5% | -4.5% |
| Max Positive | 20.6% | 14.5% | 12.9% |
| Max Negative | -8.6% | -16.2% | -14.0% |
| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 7/28/2026 | -5.5% | -6.5% | -4.5% |
| 4/29/2026 | -0.9% | -0.7% | -3.4% |
| 2/11/2026 | 20.6% | 13.0% | 5.2% |
| 10/29/2025 | -2.7% | -4.4% | 1.6% |
| 7/30/2025 | -7.9% | -6.4% | -1.2% |
| 4/30/2025 | -6.1% | -6.0% | -12.2% |
| 2/13/2025 | -1.2% | -0.3% | -1.2% |
| 10/30/2024 | -4.2% | -6.8% | -6.3% |
| 8/1/2024 | -2.8% | -4.1% | 3.3% |
| 4/30/2024 | 11.8% | 14.5% | 12.8% |
| 2/20/2024 | -5.7% | -6.5% | -0.5% |
| 10/30/2023 | -8.6% | -1.0% | 3.6% |
| 7/27/2023 | 8.1% | 6.8% | 12.9% |
| 4/27/2023 | -5.1% | -16.2% | -11.0% |
| 2/9/2023 | -0.5% | 1.1% | -14.0% |
| 10/27/2022 | 5.5% | -3.2% | 10.8% |
| 7/28/2022 | -1.5% | -8.0% | -7.4% |
| 4/28/2022 | 7.2% | 11.4% | 12.8% |
| 2/9/2022 | -8.4% | -11.8% | -11.7% |
| 10/27/2021 | 3.0% | -0.7% | -0.7% |
| 7/28/2021 | 2.6% | -0.7% | 4.6% |
| 4/28/2021 | -0.4% | 4.2% | 1.7% |
| 2/10/2021 | 2.3% | -4.5% | 9.9% |
| 10/29/2020 | -1.3% | -2.3% | 0.5% |
| 7/31/2020 | -1.0% | -5.3% | -2.8% |
| SUMMARY STATS | |||
| # Positive | 8 | 6 | 12 |
| # Negative | 17 | 19 | 13 |
| Median Positive | 6.4% | 9.1% | 4.9% |
| Median Negative | -2.8% | -4.5% | -4.5% |
| Max Positive | 20.6% | 14.5% | 12.9% |
| Max Negative | -8.6% | -16.2% | -14.0% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 06/30/2026 | 08/05/2026 | 10-Q |
| 03/31/2026 | 05/07/2026 | 10-Q |
| 12/31/2025 | 02/27/2026 | 10-K |
| 09/30/2025 | 11/07/2025 | 10-Q |
| 06/30/2025 | 08/08/2025 | 10-Q |
| 03/31/2025 | 05/09/2025 | 10-Q |
| 12/31/2024 | 03/03/2025 | 10-K |
| 09/30/2024 | 11/07/2024 | 10-Q |
| 06/30/2024 | 08/07/2024 | 10-Q |
| 03/31/2024 | 05/08/2024 | 10-Q |
| 12/31/2023 | 02/29/2024 | 10-K |
| 09/30/2023 | 11/07/2023 | 10-Q |
| 06/30/2023 | 08/07/2023 | 10-Q |
| 03/31/2023 | 05/05/2023 | 10-Q |
| 12/31/2022 | 03/01/2023 | 10-K |
| 09/30/2022 | 11/07/2022 | 10-Q |
| Report Date | Filing Date | Filing |
|---|---|---|
| 06/30/2026 | 08/05/2026 | 10-Q |
| 03/31/2026 | 05/07/2026 | 10-Q |
| 12/31/2025 | 02/27/2026 | 10-K |
| 09/30/2025 | 11/07/2025 | 10-Q |
| 06/30/2025 | 08/08/2025 | 10-Q |
| 03/31/2025 | 05/09/2025 | 10-Q |
| 12/31/2024 | 03/03/2025 | 10-K |
| 09/30/2024 | 11/07/2024 | 10-Q |
| 06/30/2024 | 08/07/2024 | 10-Q |
| 03/31/2024 | 05/08/2024 | 10-Q |
| 12/31/2023 | 02/29/2024 | 10-K |
| 09/30/2023 | 11/07/2023 | 10-Q |
| 06/30/2023 | 08/07/2023 | 10-Q |
| 03/31/2023 | 05/05/2023 | 10-Q |
| 12/31/2022 | 03/01/2023 | 10-K |
| 09/30/2022 | 11/07/2022 | 10-Q |
| 06/30/2022 | 08/05/2022 | 10-Q |
| 03/31/2022 | 05/06/2022 | 10-Q |
| 12/31/2021 | 02/25/2022 | 10-K |
| 09/30/2021 | 11/04/2021 | 10-Q |
| 06/30/2021 | 08/04/2021 | 10-Q |
| 03/31/2021 | 05/07/2021 | 10-Q |
| 12/31/2020 | 02/26/2021 | 10-K |
| 09/30/2020 | 11/06/2020 | 10-Q |
| 06/30/2020 | 08/10/2020 | 10-Q |
| 03/31/2020 | 05/15/2020 | 10-Q |
| 12/31/2019 | 03/02/2020 | 10-K |
| 09/30/2019 | 11/08/2019 | 10-Q |
External Quote Links
| Y Finance | Barrons |
| TradingView | Morningstar |
| SeekingAlpha | ValueLine |
| Motley Fool | Robinhood |
| CNBC | Etrade |
| MarketWatch | Unusual Whales |
| YCharts | Perplexity Finance |
| FinViz |
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Core Cache Last Updated: 8/31/2026