Redwood Trust, Inc. (RWT) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

-361.3%

-$8.40

vs $3.22 price

Levered DCF

-$384.21

After debt service

Piotroski score

5 / 9

Average

Altman Z-score

0.06

Distress zone

Rating

C+

Overall 2 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
P/E	-9.37×	20.41×	-67.36×	-4.73×	4.83×	-1.69×	11.33×	10.69×
P/B	0.73×	0.73×	0.72×	0.73×	1.08×	0.9×	1.05×	0.99×
P/S	0.65×	0.8×	5.43×	1.52×	1.57×	-3.15×	5.85×	6.2×
EV / EBITDA	21.24×	18.35×	1,714.98×	31.28×	17.81×	-305.3×	0×	31.11×
Gross margin	95.6%	96.9%	86.3%	96.2%	97.7%	104.0%	97.0%	96.5%
Operating margin	95.3%	84.5%	6.7%	70.6%	80.7%	138.2%	64.6%	61.7%
Net margin	-6.3%	5.0%	-1.4%	-31.3%	33.6%	183.0%	51.7%	55.3%
Current ratio	0.28×	0×	0×	0×	0×	0.88×	0.31×	0.07×
Debt / equity	22.56×	13.8×	10.68×	10.61×	9.29×	7.97×	8.65×	7.7×
Interest coverage	0.96×	1.09×	0.02×	0.67×	1.8×	-0.98×	0.44×	0.56×
Dividend yield	14.7%	11.6%	10.9%	14.1%	6.1%	8.4%	6.8%	7.2%
Payout ratio	-151.4%	185.0%	-4115.0%	-68.3%	28.7%	-14.4%	76.5%	80.9%

Key metrics by fiscal year

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
Return on equity	-7.1%	4.5%	-0.2%	-15.1%	23.1%	-52.4%	9.3%	8.9%
Return on invested capital	4.5%	38.8%	0.8%	17.3%	34.6%	-99.0%	8.7%	1.3%
Return on assets	-0.3%	0.3%	-0.0%	-1.3%	2.2%	-5.6%	0.9%	1.0%
Free cash flow yield	-1401.5%	-679.9%	-233.9%	-17.6%	-381.3%	-50.5%	5.0%	-122.2%
Earnings yield	-9.7%	6.3%	-0.3%	-20.6%	21.4%	-58.2%	8.8%	8.9%
Enterprise value	$22.6B	$17B	$13.4B	$12B	$13.9B	$9.4B	$17.5B	$11.5B
Net debt / EBITDA	20.56×	17.42×	1,604.81×	29.22×	15.9×	-272.77×	0×	27.5×
Cash conversion cycle (days)	-647	-773	-579	-861	-737	-3,605	-2,090	-1,620