Redwood Trust Valuation

Q: What is the Fair Price of RWT.PRA when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

RWT.PRA ($25.69) is trading above our estimate of [[fair value]] ($24.64)

Is RWT.PRA undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

Below Fair Value
Significantly Below Fair Value
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of RWT.PRA when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: RWT.PRA ($25.69) is trading above our estimate of fair value ($24.64)

Significantly Below Fair Value: RWT.PRA is trading above our estimate of fair value.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for RWT.PRA?

Key metric: As RWT.PRA is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for RWT.PRA. This is calculated by dividing RWT.PRA's market cap by their current earnings.
What is RWT.PRA's PE Ratio?
PE Ratio	13.4x
Earnings	US$70.61m
Market Cap	US$940.42m

RWT.PRA key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	n/a
Enterprise Value/EBITDA	n/a
PEG Ratio	0.7x

Price to Earnings Ratio vs Peers

How does RWT.PRA's PE Ratio compare to its peers?

The above table shows the PE ratio for RWT.PRA vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	12.1x
TRTX TPG RE Finance Trust	13x	14.0%	US$710.5m
CIM Chimera Investment	4.4x	-27.1%	US$1.2b
DX Dynex Capital	17.9x	23.4%	US$1.4b
NREF NexPoint Real Estate Finance	13x	26.3%	US$383.2m
RWT.PRA Redwood Trust	13.4x	19.7%	US$940.4m

Price-To-Earnings vs Peers: RWT.PRA is expensive based on its Price-To-Earnings Ratio (13.4x) compared to the peer average (12.1x).

Price to Earnings Ratio vs Industry

How does RWT.PRA's PE Ratio compare vs other companies in the US Mortgage REITs Industry?

0 Companies	Price / Earnings	Estimated Growth	Market Cap

No more companies available in this PE range

0 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: RWT.PRA is expensive based on its Price-To-Earnings Ratio (13.4x) compared to the US Mortgage REITs industry average (10.5x).

Price to Earnings Ratio vs Fair Ratio

What is RWT.PRA's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

RWT.PRA PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	13.4x
Fair PE Ratio	14.6x

Price-To-Earnings vs Fair Ratio: RWT.PRA is good value based on its Price-To-Earnings Ratio (13.4x) compared to the estimated Fair Price-To-Earnings Ratio (14.6x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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