Redwood Trust Inc. 9.125% Senior Notes Due 2029 (RWTN)

Key Financials

AI Analysis

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

I begin by remembering that this is a senior note due 2029, not common stock, so I am underwriting credit and coupon, not earnings growth alone. The issuer's filed record is uneven. In fiscal 2024, the year ended 2024-12-31, net income was $54.0 million and diluted EPS $0.32. Then in fiscal 2025, the year ended 2025-12-31, it swung to a net loss of $70.0 million and diluted EPS -$0.63; fiscal 2023 had also been negative, with a net loss of $2.3 million and diluted EPS -$0.11. The quarterly path shows stress but some improvement: in fiscal Q2 2025, the quarter ended 2025-06-30, the net loss was $98.5 million and diluted EPS -$0.76; by fiscal Q1 2026, the quarter ended 2026-03-31, the net loss was $5.5 million and diluted EPS -$0.07; and in fiscal Q2 2026, the quarter ended 2026-06-30, the net loss was $1.1 million and diluted EPS -$0.03. I cannot see revenue in the filed figures, and the supplied FairStock valuation and return metrics are N/A, so I cannot calculate a margin of safety from earnings, book value, or return on capital. The 9.125% coupon is high enough to demand attention, but it also raises the question of why the issuer must pay that rate. A moat is not visible in these numbers. The Lynch category is TURNAROUND—loss in the latest year after earlier profits—and that fits: the trend is improving, but not yet proven. At $21.78, near the $21.30 low of the $21.30-$25.77 52-week range, the price reflects caution.

In plain English: The issuer is in real estate, and the security being analyzed is a 9.125% senior note due 2029 rather than common stock. The filed results look weak: fiscal 2025 showed a $70.0 million loss after a $54.0 million profit in fiscal 2024, and recent quarters remained negative, although the loss narrowed by fiscal Q2 2026. The $21.78 price is near the low end of its 52-week range, but the available numbers do not give a clear cheap, fair, or expensive read for these notes.

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Data as of 2026-10-16 close · note generated 2026-10-20 · 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