Redwood Trust Inc. Common Stock (RWT)

FairStock Score: 65/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

Redwood is a mortgage finance company, and I start with quality. I see no durable moat; mortgage banking and investing are cyclical, spread-sensitive and credit-sensitive businesses. At the 2026-10-26 close of $3.23, FairStock's P/B was 0.47, so the market is valuing stated book at less than half. That can be attractive, but only if book value is real and earnings can normalize. The record is not steady: FY2024 produced $54.0M of net income and $0.32 diluted EPS, but FY2025 reversed to a $70.0M net loss and -$0.63 diluted EPS; FY2023 was also a loss, at $2.3M and -$0.11 diluted EPS. In fiscal Q2 2026 (quarter ended 2026-06-30), net loss was $1.1M and diluted EPS -$0.03, after a $5.5M net loss in fiscal Q1 2026. FairStock's ROE of 0.57% and ROCE of 0.02% are weak, and its Piotroski F-score of 1/9 is poor. D/E of 29.40 means leverage and underwriting risk deserve close attention. The 18.27% dividend yield looks generous but is not supported by recent losses, so it may be fragile. FairStock puts it in the TURNAROUND category—loss in the latest year after earlier profits. CET1, NIM and combined ratio are not in the data. A 0.47 P/B can be a bargain or a warning; without sustainable ROE above cost of capital, this is cheap-looking but speculative, not a high-quality compounder.

In plain English: Redwood Trust is a mortgage finance company that buys, sells and invests in mortgage loans. The business looks weak right now: it lost money in its latest reported quarter and its profits have been uneven. The share price looks low compared with the company's accounting net worth, but the losses make it hard to call the stock plainly cheap.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-26 close · note generated 2026-10-28 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer