Redwood Trust (NYSE:RWT) Issues Quarterly Earnings Results, Beats Expectations By $0.11 EPS

Redwood Trust (NYSE:RWT) released its quarterly earnings data on Wednesday. The real estate investment trust reported $0.33 EPS for the quarter, beating the consensus estimate of $0.22 by $0.11, Zacks reports. The company had revenue of $87.30 million for the quarter, compared to analyst estimates of $24.88 million. Redwood Trust had a positive return on equity of 11.71% and a negative net margin of 8.62%.

Here are the key takeaways from Redwood Trust’s conference call:

• Management highlighted record mortgage banking volumes—$23 billion for full-year 2025 with Sequoia locking $5.3 billion in Q4 and January volumes of $3.6 billion—and has redeployed over 80% of capital into core operating platforms (up from 57% in 2024).
• Operating leverage and profitability improved materially: Q4 GAAP net income was $18.3M, consolidated EAD rose to $0.20 per share, Sequoia segment net income was $43.8M, and management expects 2026 consolidated earnings to exceed the common dividend, enabling reinvestment.
• Aspire (non?QM) is scaling fast—$1.5 billion locked in Q4 with an inaugural Aspire securitization expected soon—supporting distribution, margin expansion and an additional capital?light growth channel.
• Progress on legacy portfolio wind?down reduced the bridge portfolio principal by ~40% in Q4, lowered 90+ day delinquencies by over 65%, and concentrated remaining exposure to 31 loans (~$309M UPB), freeing capital and simplifying the balance sheet.
• Risks remain around funding and market volatility: recourse leverage rose (driven by higher warehouse utilization with ~62% of recourse debt in fast?turning mortgage banking platforms), liquidity was $256M at year?end, and a broader refinance recovery is still contingent on further rate declines.

Redwood Trust Price Performance

RWT opened at $6.66 on Friday. The company has a quick ratio of 57.77, a current ratio of 57.77 and a debt-to-equity ratio of 22.73. The company’s 50-day moving average price is $5.66 and its 200 day moving average price is $5.69. Redwood Trust has a fifty-two week low of $4.68 and a fifty-two week high of $6.97. The firm has a market cap of $843.94 million, a price-to-earnings ratio of -10.92 and a beta of 1.59.

Redwood Trust Dividend Announcement

The firm also recently disclosed a quarterly dividend, which was paid on Tuesday, December 30th. Investors of record on Tuesday, December 23rd were paid a dividend of $0.18 per share. The ex-dividend date was Tuesday, December 23rd. This represents a $0.72 annualized dividend and a yield of 10.8%. Redwood Trust’s dividend payout ratio is -88.89%.

Institutional Trading of Redwood Trust

Institutional investors and hedge funds have recently made changes to their positions in the stock. Wellington Management Group LLP boosted its holdings in shares of Redwood Trust by 10.2% during the third quarter. Wellington Management Group LLP now owns 15,020,483 shares of the real estate investment trust’s stock valued at $86,969,000 after acquiring an additional 1,395,675 shares during the period. Invesco Ltd. lifted its position in Redwood Trust by 29.9% in the 3rd quarter. Invesco Ltd. now owns 2,034,437 shares of the real estate investment trust’s stock valued at $11,779,000 after purchasing an additional 468,720 shares during the last quarter. Jane Street Group LLC acquired a new position in Redwood Trust during the 1st quarter valued at about $2,018,000. Millennium Management LLC acquired a new position in Redwood Trust during the 3rd quarter valued at about $1,300,000. Finally, Nomura Holdings Inc. grew its position in Redwood Trust by 220.3% in the 2nd quarter. Nomura Holdings Inc. now owns 120,316 shares of the real estate investment trust’s stock worth $711,000 after purchasing an additional 220,316 shares during the last quarter. 74.34% of the stock is currently owned by institutional investors and hedge funds.

Analyst Upgrades and Downgrades

Several research firms recently commented on RWT. Wall Street Zen lowered Redwood Trust from a “hold” rating to a “sell” rating in a research report on Saturday, February 7th. Zacks Research raised Redwood Trust from a “hold” rating to a “strong-buy” rating in a research report on Monday, January 26th. Weiss Ratings reaffirmed a “sell (d)” rating on shares of Redwood Trust in a report on Thursday, January 22nd. JPMorgan Chase & Co. upgraded shares of Redwood Trust from a “neutral” rating to an “overweight” rating and set a $6.00 price objective on the stock in a research note on Friday, January 23rd. Finally, Jones Trading decreased their price objective on shares of Redwood Trust from $7.00 to $6.25 and set a “buy” rating for the company in a report on Thursday, October 30th. One investment analyst has rated the stock with a Strong Buy rating, five have given a Buy rating, one has given a Hold rating and one has assigned a Sell rating to the company’s stock. Based on data from MarketBeat, Redwood Trust presently has a consensus rating of “Moderate Buy” and a consensus target price of $6.75.

About Redwood Trust

Redwood Trust, Inc (NYSE:RWT) is a publicly traded real estate investment trust specializing in the U.S. residential mortgage market. Headquartered in Mill Valley, California, the company focuses on investing in a diversified portfolio of residential mortgage assets, including whole loans, agency and non-agency mortgage-backed securities, and structured credit products.

The company’s core activities encompass the acquisition, financing, and management of prime residential mortgage whole loans and mortgage-backed securities.