Redwood Trust (NYSE:RWT) Posts Earnings Results, Misses Expectations By $0.23 EPS

Key Points

• Redwood Trust missed quarterly expectations sharply: it reported an $0.02 loss per share versus consensus earnings of $0.21, while revenue of $12.9 million came in well below the $85.52 million estimate.
• The stock fell to $3.10 in Tuesday trading. Redwood also paid a quarterly dividend of $0.18 per share, equivalent to a 23.3% yield at the reported share price.
• Company insiders bought shares recently, including the president and CFO. Analysts’ consensus rating is “Hold,” with an average price target of $5.25.

Redwood Trust (NYSE:RWT - Get Free Report) released its quarterly earnings data on Tuesday. The real estate investment trust reported ($0.02) earnings per share for the quarter, missing analysts' consensus estimates of $0.21 by ($0.23), FiscalAI reports. The firm had revenue of $12.90 million for the quarter, compared to the consensus estimate of $85.52 million. Redwood Trust had a net margin of 0.42% and a return on equity of 16.02%.

Redwood Trust Stock Performance

Redwood Trust stock traded down $0.14 during midday trading on Tuesday, reaching $3.10. 3,132,596 shares of the company traded hands, compared to its average volume of 2,633,546. The firm has a market capitalization of $388.76 million, a price-to-earnings ratio of -77.36 and a beta of 1.45. The business has a 50 day moving average of $3.71 and a two-hundred day moving average of $4.99. Redwood Trust has a 12 month low of $2.88 and a 12 month high of $6.97. The company has a debt-to-equity ratio of 31.69, a current ratio of 67.49 and a quick ratio of 67.49.

Redwood Trust Dividend Announcement

The business also recently disclosed a quarterly dividend, which was paid on Wednesday, September 30th. Stockholders of record on Wednesday, September 23rd were issued a dividend of $0.18 per share. This represents a $0.72 annualized dividend and a dividend yield of 23.3%. The ex-dividend date of this dividend was Wednesday, September 23rd. Redwood Trust's payout ratio is presently -1,800.00%.

Insider Activity at Redwood Trust

In related news, President Dashiell Robinson bought 63,211 shares of the business's stock in a transaction on Wednesday, September 16th. The stock was acquired at an average price of $3.98 per share, with a total value of $251,579.78. Following the transaction, the president owned 395,050 shares in the company, valued at approximately $1,572,299. This trade represents a 19.05% increase in their position. The purchase was disclosed in a filing with the SEC, which is accessible through this link. Also, CFO Brooke Carillo bought 26,065 shares of the firm's stock in a transaction on Tuesday, September 15th. The shares were bought at an average price of $3.85 per share, with a total value of $100,350.25. Following the completion of the purchase, the chief financial officer owned 140,481 shares in the company, valued at approximately $540,851.85. The trade was a 22.78% increase in their position. The SEC filing for this purchase provides additional information. Over the last ninety days, insiders have purchased 244,171 shares of company stock worth $948,402. Company insiders own 3.30% of the company's stock.

Analysts Set New Price Targets

RWT has been the subject of several analyst reports. BTIG Research reduced their price target on shares of Redwood Trust from $6.00 to $5.00 and set a "buy" rating for the company in a research report on Tuesday, October 6th. Zacks Research cut Redwood Trust from a "hold" rating to a "strong sell" rating in a research report on Wednesday, October 14th. JPMorgan Chase & Co. cut their target price on Redwood Trust from $6.50 to $6.00 and set an "overweight" rating on the stock in a research note on Friday, July 17th. Weiss Ratings reissued a "sell (d)" rating on shares of Redwood Trust in a report on Monday, September 21st. Finally, UBS Group decreased their price target on Redwood Trust from $7.00 to $6.50 and set a "buy" rating for the company in a research note on Friday, August 21st. Seven investment analysts have rated the stock with a Buy rating, two have given a Hold rating and two have assigned a Sell rating to the stock. According to MarketBeat.com, the company presently has a consensus rating of "Hold" and an average target price of $5.25.

Redwood Trust Company Profile

Redwood Trust, Inc is a specialty finance company and real estate investment trust headquartered in Mill Valley, California. Founded in 1994 and traded on the New York Stock Exchange under the symbol RWT, the company focuses on investing in and financing residential real estate credit.

Redwood Trust's activities include acquiring, originating, securitizing and managing residential mortgage loans and related assets. Its portfolio has historically included jumbo and other non-agency residential mortgages, mortgage-backed securities, mortgage servicing rights and other residential credit investments.

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