Redwood Trust, Inc (RWT) Fair Value & Analysis
Real Estate · US · Market cap $624M
Redwood Trust, Inc
RWT · US
Fair value as of: Jul 27, 2026
From 3 valuation models · updated 14 days ago
Share price −0.4% over the past month.
Below-average quality, screening 117% undervalued on our models.
What matters now
- The large discount to fair value meets weak quality (39/100). That raises the risk this is a value trap rather than a bargain.
- The price is below even our cautious bear case ($6.04). The market is more pessimistic than our downside scenario.
- A fairly wide model range ($6.04 to $13.49) leaves room in how you read the outcome.
- As a real-estate business, asset- and dividend-based methods carry more weight here than a standard DCF.
Price vs Fair Value (5 years)
White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Jul 27, 2026.
How to read this chart
60‑month range $3.63 – $8.22 · fair‑value band $6.04 – $13.49 · the $4.73 price screens below the $10.27 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). Dashed = 300-day average. As of Jul 27, 2026.
Analysis
Redwood Trust, Inc (RWT) currently trades at $4.73, while our model-based Fair Value estimate is $10.27, implying the stock looks roughly 117.1% undervalued today. The Quality Score stands at 39/100 (below-average quality), in the Real Estate sector. Bull case: trading below our estimate, it may offer upside if the fundamentals hold. Bear case: a low price can be a value trap when quality is weak or the data is thin (evidence: medium), always confirm before acting.
Over the trailing twelve months, Redwood Trust, Inc generated revenue of $167M at a net margin of -54.8%. Revenue declined 13.4% year over year. It earns a return on equity of -8.6%. Net debt stands at $21.9B. Fundamentals as of Jul 27, 2026
Our scenario range runs from $6.04 (bear case) to $13.49 (bull case); at $4.73, the current price sits below that range. Bear and bull are the same models run on conservative and optimistic assumptions (margins, growth, valuation multiples), so a plausible valuation range, not a price target. The share trades about 27% below its 52-week high and 5% above its 52-week low, currently below its 200-day average. For context, the median of 10 Real Estate peers we cover trades at 2% fair-value upside, at 117%, RWT screens cheaper than that median.
Fair Value models
Each model estimates fair value its own way; the Fair Value above is the evidence-weighted blend. Evidence (0–100) measures how completely this model’s inputs are available: well-fed models carry more weight in the blend. The spread across models is intentional, each one stresses a different value driver; dividend models, for instance, come out structurally low when payout is small.
All 3 models by family
Widest divergence: Dividend Discount ($10.82) versus Asset-Based ($5.26). Highest evidence: Gordon GGM (70).
Key figures & financial health
More key figures
Figures from reported company fundamentals · as of Jul 27, 2026. TTM = trailing twelve months.
Quality Score breakdown
Of which business quality 40 · Market factors (momentum, volatility) 30
Non-valuation factor families (profitability, growth, cashflow, financial strength, momentum …), each academically grounded. Valuation itself sits in the Fair Value and is deliberately excluded here to avoid double-counting.
About the company
Redwood Trust, Inc., together with its subsidiaries, operates as a specialty finance company in the United States. It operates through four segments: Sequoia Mortgage Banking, CoreVest Mortgage Banking, Redwood Investments, and Legacy Investments.
Full company description
Redwood Trust, Inc., together with its subsidiaries, operates as a specialty finance company in the United States. It operates through four segments: Sequoia Mortgage Banking, CoreVest Mortgage Banking, Redwood Investments, and Legacy Investments. The Residential Consumer Mortgage Banking segment operates a mortgage loan conduit that acquires residential loans from third-party originators for subsequent sale, securitization, or transfer to its investment portfolio. The CoreVest Mortgage Banking segment operates a platform that originates residential investor loans for subsequent securitization, sale, or transfer into the Redwood Investments portfolio or into joint ventures. This segment also includes various derivative financial instruments that we utilize to manage certain risks associated with our inventory of loans held for sale. The Redwood Investments segment primarily targets investments with sensitivity to housing credit risk, sourced through our operating platforms where control the underwriting and collateral review. Going forward, the Redwood Investments portfolio will focus on retained interests from the company's own securitizations and other investment vehicles, rather than third-party securities, consistent with Redwood's strategic shift toward internally originated investments. The Legacy Investments segment consists of assets no longer aligned with our core strategic objectives, including legacy unsecuritized bridge and term loans, residential re-performing loan securities, and other non-core legacy assets that are in the active process of sale, runoff, or other disposition as part of the accelerated strategic repositioning of our business model. Redwood Trust, Inc. was incorporated in 1994 and is headquartered in Mill Valley, California.
Company description, as reported by the company or data provider.
Revenue & earnings trend
FY2021 – FY2025 · reported fiscal years
Redwood Trust, Inc reported revenue of $1.1B in FY2025 versus $540M in FY2021, a compound +19.7%/yr. Reported net income was −$70.0M in FY2025.
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Earlier news
External third-party headlines (Yahoo Finance, Reuters and others), not an editorial selection.
- Redwood targets Aspire to 10% non-QM share by year-end 2026 as Crayhill JV scales to $8B
- Redwood Trust Q2 Earnings Call Highlights
Peer Group
REIT - Mortgage · 40 stocks
How this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.
Valuation Multiples vs REIT - Mortgage median · lower = cheaper
Snowflake
Five quick dimensions, each 0 to 100: VALUE (fair-value potential), FUTURE (revenue growth), PAST (return on equity), HEALTH (low debt), DIVIDEND (yield). Green = this stock, grey = typical sector peer.
Insider activity: 25/100
Values & ESG
Does this company touch areas you may want to avoid? The classification is inferred from sector and industry.
ESG scores are not available for this stock yet. Values and ESG data are contextual and can differ between providers.
Similar stocks
10 more REIT - Mortgage stocks, each showing price versus our Fair Value estimate (as of Jul 27, 2026).
| Stock | Price | Fair Value | vs Fair Value |
|---|---|---|---|
| Annaly Capital Management, Inc NLY | $22.45 | $22.84 | +2% |
| AGNC Investment Corp AGNC | $10.56 | $12.03 | +14% |
| Starwood Property Trust, Inc STWD | $16.52 | $14.93 | -10% |
| Rithm Capital Corp RITM | $9.12 | $20.75 | +128% |
| Blackstone Mortgage Trust, Inc BXMT | $16.69 | $14.84 | -11% |
| Dynex Capital, Inc DX | $12.60 | $7.67 | -39% |
| ARMOUR Residential REIT, Inc ARR | $16.13 | $20.28 | +26% |
| Ellington Financial Inc EFC | $13.37 | $13.45 | +1% |
| Apollo Commercial Real Estate Finance, Inc ARI | $6.76 | $13.56 | +101% |
| Orchid Island Capital, Inc ORC | $6.54 | $6.26 | -4% |
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How we calculate Fair Value
Each company is valued through a stack of independent intrinsic-value models (DCF variants, residual-income, multiples and more), blended into one family-balanced consensus and weighted by how much trustworthy data backs it. A separate quality layer scores the fundamentals. Every input is real reported data, nothing guessed.
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