Wedbush Has Pessimistic Outlook of Redwood Trust Q3 Earnings

Key Points

• Wedbush analysts have reduced their earnings estimate for Redwood Trust's Q3 2025 from $0.17 to $0.14 per share, while the consensus for full-year earnings remains at $0.78 per share.
• Redwood Trust recently missed analysts' consensus earnings expectations, reporting $0.18 per share, falling short of the projected $0.19.
• The company announced a quarterly dividend of $0.18 per share, resulting in an annualized dividend yield of 13.2%, although it has a negative payout ratio of -112.50%.

Redwood Trust, Inc. (NYSE:RWT - Free Report) - Equities researchers at Wedbush reduced their Q3 2025 earnings per share (EPS) estimates for shares of Redwood Trust in a research note issued on Wednesday, July 30th. Wedbush analyst J. Mccanless now forecasts that the real estate investment trust will post earnings per share of $0.14 for the quarter, down from their previous estimate of $0.17. The consensus estimate for Redwood Trust's current full-year earnings is $0.78 per share. Wedbush also issued estimates for Redwood Trust's Q4 2025 earnings at $0.17 EPS and FY2026 earnings at $0.72 EPS.

Redwood Trust (NYSE:RWT - Get Free Report) last issued its quarterly earnings data on Wednesday, July 30th. The real estate investment trust reported $0.18 earnings per share for the quarter, missing analysts' consensus estimates of $0.19 by ($0.01). Redwood Trust had a positive return on equity of 8.57% and a negative net margin of 9.26%. The company had revenue of ($38.10) million for the quarter, compared to analysts' expectations of $31.00 million.

A number of other equities analysts also recently commented on the company. UBS Group reduced their price objective on Redwood Trust from $7.00 to $6.50 and set a "buy" rating on the stock in a research report on Thursday. Keefe, Bruyette & Woods cut Redwood Trust from an "outperform" rating to a "market perform" rating and cut their target price for the stock from $7.00 to $6.50 in a research note on Thursday, July 10th. Jones Trading restated a "buy" rating and set a $7.00 price target on shares of Redwood Trust in a report on Friday, May 2nd. Wall Street Zen cut Redwood Trust from a "hold" rating to a "strong sell" rating in a research report on Saturday. Finally, JPMorgan Chase & Co. boosted their target price on Redwood Trust from $5.50 to $6.00 and gave the company a "neutral" rating in a report on Thursday, May 1st. One analyst has rated the stock with a sell rating, four have issued a hold rating, three have given a buy rating and one has assigned a strong buy rating to the stock. Based on data from MarketBeat, Redwood Trust currently has an average rating of "Hold" and a consensus target price of $7.31.

Redwood Trust Stock Performance

Redwood Trust stock traded up $0.27 during midday trading on Friday, hitting $5.73. 1,360,148 shares of the company were exchanged, compared to its average volume of 1,001,501. The firm has a market capitalization of $762.10 million, a PE ratio of -8.95 and a beta of 1.31. The business has a fifty day simple moving average of $5.80 and a two-hundred day simple moving average of $5.99. The company has a debt-to-equity ratio of 18.74, a quick ratio of 39.35 and a current ratio of 39.35. Redwood Trust has a fifty-two week low of $4.68 and a fifty-two week high of $8.15.

Hedge Funds Weigh In On Redwood Trust

A number of hedge funds have recently modified their holdings of the stock. Quantbot Technologies LP acquired a new stake in shares of Redwood Trust in the first quarter valued at about $37,000. CWM LLC grew its holdings in Redwood Trust by 270.5% during the 2nd quarter. CWM LLC now owns 6,168 shares of the real estate investment trust's stock worth $36,000 after acquiring an additional 4,503 shares during the period. AlphaQuest LLC grew its holdings in Redwood Trust by 165.5% during the 1st quarter. AlphaQuest LLC now owns 8,589 shares of the real estate investment trust's stock worth $52,000 after acquiring an additional 5,354 shares during the period. Carrera Capital Advisors acquired a new stake in Redwood Trust during the 1st quarter worth $65,000. Finally, XTX Topco Ltd bought a new position in shares of Redwood Trust during the first quarter worth $65,000. 74.34% of the stock is owned by institutional investors and hedge funds.

Redwood Trust Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Monday, June 30th. Shareholders of record on Monday, June 23rd were paid a dividend of $0.18 per share. This represents a $0.72 annualized dividend and a yield of 12.6%. The ex-dividend date of this dividend was Monday, June 23rd. Redwood Trust's payout ratio is -112.50%.

About Redwood Trust

Redwood Trust, Inc, together with its subsidiaries, operates as a specialty finance company in the United States. The company operates through three segments: Residential Consumer Mortgage Banking, Residential Investor Mortgage Banking, and Investment Portfolio. 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.