MODEL VERDICT
Redwood Trust, Inc. (RWT)
Relative Valuation•Peer multiples, Monte Carlo simulation & quality-adjusted fair value
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Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| May 1, 2026 | NEUTRAL | 0.48 | $5.73 | CURRENT | — |
| Apr 24, 2026 | MODERATE | 0.63 | $5.71 | CURRENT | — |
| Apr 17, 2026 | MODERATE | 0.63 | $6.00 | CURRENT | — |
| Apr 16, 2026 | MODERATE | 0.63 | $6.06 | CURRENT | — |
| Apr 10, 2026 | MODERATE | 0.66 | $5.93 | CURRENT | — |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Dividend Yield 9 industry peers | $6.69 | +16.8% | 12% | B | Supplementary |
| Price / Book 10 industry peers | $6.15 | +7.3% | 8% | B | Model Driven |
| Forward P/E 9 analyst estimates | $5.88 | +2.6% | 5% | A- | Analyst Est. |
| Price / Sales 10 industry peers | $4.63 | -19.2% | 2% | B | Model Driven |
| Weighted Output Blended model output | $6.82 | +19.0% | 100% | 64 | UNDERVALUED |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 12.43 | 11.33 | 5.57 | 20.41 | 7.48 |
| EV/EBITDA | 398.12 | 143.10 | 36.83 | 1269.43 | 587.17 |
| P/FFO | 23.85 | 10.79 | 5.33 | 68.49 | 29.93 |
| P/TBV | 0.77 | 0.75 | 0.13 | 1.39 | 0.37 |
| P/B Ratio | 0.74 | 0.73 | 0.13 | 1.35 | 0.36 |
| Div Yield | 0.10 | 0.10 | 0.05 | 0.16 | 0.04 |
| P/S Ratio | 4.58 | 3.56 | 3.47 | 6.91 | 1.55 |
Based on our peer multiples analysis with 12 valuation metrics, the model estimates RWT's fair value at $6.82 vs the current price of $5.73, implying +19.0% upside potential. Model verdict: Undervalued. Confidence: 64/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $6.82 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $6.00 (P10) to $8.85 (P90), with a median of $6.93.
RWT's current P/E of -9.1x compares to the industry median of 9.4x (8 peers in the group). This represents a -197.1% discount to the industry. The historical average P/E is 12.4x over 3 years. Signal: Deep Discount.
23 analysts cover RWT with a consensus rating of Hold. The consensus price target is $6.50 (range: $6.50 — $6.50), implying +13.4% upside from the current price. Grade breakdown: Strong Buy (1), Buy (10), Hold (12), Sell (0), Strong Sell (0).
The model confidence score is 64/100, based on: data completeness (11), peer quality (25), historical depth (20), earnings stability (4), and model agreement (4). Cyclicality penalty: -0 points. The model shows moderate agreement across inputs.
The model flags several key risks: (1) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk data is not available for RWT.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.