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

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

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 Trading Up 0.7%

Shares of NYSE:RWT traded up $0.05 during mid-day trading on Friday, reaching $6.73. The stock had a trading volume of 805,800 shares, compared to its average volume of 1,531,477. The firm has a 50 day simple moving average of $5.66 and a two-hundred day simple moving average of $5.69. Redwood Trust has a twelve month low of $4.68 and a twelve month high of $6.97. The firm has a market cap of $852.05 million, a PE ratio of -11.04 and a beta of 1.59. The company has a current ratio of 57.77, a quick ratio of 57.77 and a debt-to-equity ratio of 22.73.

Redwood Trust Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Tuesday, December 30th. Stockholders of record on Tuesday, December 23rd were paid a $0.18 dividend. The ex-dividend date of this dividend was Tuesday, December 23rd. This represents a $0.72 dividend on an annualized basis and a dividend yield of 10.7%. Redwood Trust’s dividend payout ratio is -88.89%.

Hedge Funds Weigh In On Redwood Trust

Hedge funds and other institutional investors have recently made changes to their positions in the company. Russell Investments Group Ltd. increased its position in shares of Redwood Trust by 331.8% in the 2nd quarter. Russell Investments Group Ltd. now owns 7,915 shares of the real estate investment trust’s stock valued at $47,000 after buying an additional 6,082 shares in the last quarter. Verition Fund Management LLC acquired a new position in Redwood Trust in the third quarter valued at about $64,000. Tower Research Capital LLC TRC grew its stake in Redwood Trust by 136.9% in the second quarter. Tower Research Capital LLC TRC now owns 10,823 shares of the real estate investment trust’s stock valued at $64,000 after acquiring an additional 6,255 shares during the period. Lighthouse Investment Partners LLC bought a new stake in shares of Redwood Trust in the second quarter worth about $74,000. Finally, BNP Paribas Financial Markets raised its position in shares of Redwood Trust by 53.2% during the second quarter. BNP Paribas Financial Markets now owns 13,506 shares of the real estate investment trust’s stock worth $80,000 after purchasing an additional 4,692 shares during the period. 74.34% of the stock is owned by institutional investors.

Wall Street Analysts Forecast Growth

RWT has been the topic of several research analyst reports. Weiss Ratings restated 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 for the company in a research report on Friday, January 23rd. Zacks Research raised shares of Redwood Trust from a “hold” rating to a “strong-buy” rating in a research note on Monday, January 26th. Wall Street Zen cut shares of Redwood Trust from a “hold” rating to a “sell” rating in a research note on Saturday, February 7th. Finally, Jones Trading lowered their price target 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 issued a Buy rating, one has issued a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat.com, the company has a consensus rating of “Moderate Buy” and a consensus target price of $6.75.

Redwood Trust Company Profile

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.