Redwood Trust Inc. Common Stock (RWT)

FairStock Score: 65/100 — STEADY

Key Financials

Strengths

• Healthy net profit margin of 10.9% showing consistent profitability
• Revenue growth of 93.1% demonstrates strong top-line momentum
• Attractive 13.7% dividend yield providing steady income returns

Concerns

• High leverage at 26.56x debt-to-equity increases financial risk and interest expense burden
• Altman Z-Score of -0.1 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Redwood Trust Inc. Common Stock is a micro-cap real estate company valued at $716 million. The business generates $167 million in annual revenue with a 10.9% net margin. From a quality standpoint, Redwood shows distressed Altman Z-Score of -0.1 warrants caution and negative ROE indicating losses. Growth dynamics show revenue growing at 93.1% and profit growth of 402.6%. The 13.7% dividend yield adds an income component for patient holders. Our composite FairStock Score of 65/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Redwood's 93% revenue growth trajectory could accelerate as it captures additional market share in the real estate sector. Operational leverage in the business model means incremental revenue growth could disproportionately boost bottom-line profitability.

Bear Case

Elevated leverage at 26.6x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer