MeritValue

REDWOOD TRUST INC

RWTdata completeness 75%18 fiscal years on file

Data notes: no data for concept 'capex'

The thesis, from the filings

REDWOOD TRUST INC earns about 10% on invested capital, and has bought back 8% of its shares over 5 years. The cash-flow models don't apply cleanly here — the ledger says why below.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$574.9M1$707.9M2$724.5M3$945.2M3$1.18B3
Net income$319.6M4−$163.5M5−$2.27M6$54M6−$70M6
Operating cash flow−$5.69B7−$139.1M8−$2.02B9−$5.86B9−$10.1B9
Capital expenditure—————
Free cash flow (derived)—————
Total debt$3.82B10$3.76B11$3.24B11——
Cash & equivalents$450M12$259M13$293M14$245.2M14$255.7M14
Diluted shares142.1M117.2M116.3M132.1M130.3M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$75.44
your share of equity
Profit it earned you last year
−$5.38
Free cash flow it threw off
—
Debt you’d be carrying
—

10 shares is a claim on $75.44 of net worth that earned you −$5.38 last year.

iii. Is this a good business?
Moat signal · return on invested capital
10% avg · 5y
FY21 15%FY22 6%FY23 12%FY24 14%FY25 4%

It earned an average 10% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
−8% shares · 5y

Share count is down 8% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has fallen 15% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
DCF · Growth Exit 5Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
Earnings Power Value
not applicable
normalized (5y-median) earnings non-positive — EPV undefined
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000930236-24-000009 (InterestAndDividendIncomeOperating)
  2. 10-K · period ending 2022-12-31 · accession 0000930236-25-000007 (InterestAndDividendIncomeOperating)
  3. 10-K · period ending 2023-12-31 · accession 0000930236-26-000007 (InterestAndDividendIncomeOperating)
  4. 10-K · period ending 2021-12-31 · accession 0000930236-24-000009 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000930236-25-000007 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0000930236-26-000007 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000930236-24-000009 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000930236-25-000007 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0000930236-26-000007 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000930236-23-000008 (LongTermDebt)
  11. 10-K · period ending 2022-12-31 · accession 0000930236-24-000009 (LongTermDebt)
  12. 10-K · period ending 2021-12-31 · accession 0000930236-24-000009 (CashAndCashEquivalentsAtCarryingValue)
  13. 10-K · period ending 2022-12-31 · accession 0000930236-25-000007 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2023-12-31 · accession 0000930236-26-000007 (CashAndCashEquivalentsAtCarryingValue)