Discounted Cash Flow (DCF) Analysis Unlevered
Redwood Trust, Inc. (RWT)
$5.89
+0.19 (+3.33%)
All numbers are in Millions, Currency in USD
Operating Data
Year A/P | 2018 Actual | 2019 Actual | 2020 Actual | 2021 Actual | 2022 Actual | 2023 Projected | 2024 Projected | 2025 Projected | 2026 Projected | 2027 Projected |
| Revenue | 213.03 | 304.47 | -352 | 525.65 | -163 | 62.36 | -23.86 | 9.13 | -3.49 | 1.34 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (%) | ||||||||||
| EBITDA | 371.03 | 666.56 | -121.63 | 781.62 | 423.92 | 39.44 | -15.09 | 5.77 | -2.21 | 0.84 |
| EBITDA (%) | ||||||||||
| EBIT | 369.73 | 656.43 | -139 | 764.84 | 408 | 40.39 | -15.45 | 5.91 | -2.26 | 0.87 |
| EBIT (%) | ||||||||||
| Depreciation | 1.31 | 10.13 | 17.37 | 16.78 | 15.92 | -0.94 | 0.36 | -0.14 | 0.05 | -0.02 |
| Depreciation (%) |
Balance Sheet Data
Year A/P | 2018 Actual | 2019 Actual | 2020 Actual | 2021 Actual | 2022 Actual | 2023 Projected | 2024 Projected | 2025 Projected | 2026 Projected | 2027 Projected |
| Total Cash | 175.76 | 436.30 | 461 | 657.28 | 662 | -23.23 | 8.89 | -3.40 | 1.30 | -0.50 |
|---|---|---|---|---|---|---|---|---|---|---|
| Total Cash (%) | ||||||||||
| Account Receivables | 154.84 | 304.16 | -303.75 | 453.59 | -140.65 | 53.81 | -20.59 | 7.88 | -3.01 | 1.15 |
| Account Receivables (%) | ||||||||||
| Inventories | - | - | - | - | - | - | - | - | - | - |
| Inventories (%) | ||||||||||
| Accounts Payable | 42.53 | 60.66 | -70.20 | 104.83 | -32.51 | 12.44 | -4.76 | 1.82 | -0.70 | 0.27 |
| Accounts Payable (%) | ||||||||||
| Capital Expenditure | -25.49 | -36.43 | 42.12 | -62.89 | 19.50 | -7.46 | 2.85 | -1.09 | 0.42 | -0.16 |
| Capital Expenditure (%) |
Weighted Average Cost Of Capital
| Share price | $ 5.89 |
|---|---|
| Beta | 1.411 |
| Diluted Shares Outstanding | 117.23 |
| Cost of Debt | |
| Tax Rate | -13.89 |
| After-tax Cost of Debt | 14.67% |
| Risk-Free Rate | |
| Market Risk Premium | |
| Cost of Equity | 10.471 |
| Total Debt | 3,763 |
| Total Equity | 690.47 |
| Total Capital | 4,453.47 |
| Debt Weighting | 84.50 |
| Equity Weighting | 15.50 |
| Wacc |
Build Up Free Cash
Year A/P | 2018 Actual | 2019 Actual | 2020 Actual | 2021 Actual | 2022 Actual | 2023 Projected | 2024 Projected | 2025 Projected | 2026 Projected | 2027 Projected |
| Revenue | 213.03 | 304.47 | -352 | 525.65 | -163 | 62.36 | -23.86 | 9.13 | -3.49 | 1.34 |
|---|---|---|---|---|---|---|---|---|---|---|
| EBITDA | 371.03 | 666.56 | -121.63 | 781.62 | 423.92 | 39.44 | -15.09 | 5.77 | -2.21 | 0.84 |
| EBIT | 369.73 | 656.43 | -139 | 764.84 | 408 | 40.39 | -15.45 | 5.91 | -2.26 | 0.87 |
| Tax Rate | 8.48% | 4.21% | 0.85% | 5.47% | -13.89% | 1.02% | 1.02% | 1.02% | 1.02% | 1.02% |
| EBIAT | 338.36 | 628.78 | -137.81 | 723.04 | 464.67 | 39.97 | -15.29 | 5.85 | -2.24 | 0.86 |
| Depreciation | 1.31 | 10.13 | 17.37 | 16.78 | 15.92 | -0.94 | 0.36 | -0.14 | 0.05 | -0.02 |
| Accounts Receivable | - | -149.33 | 607.91 | -757.33 | 594.24 | -194.46 | 74.40 | -28.46 | 10.89 | -4.17 |
| Inventories | - | - | - | - | - | - | - | - | - | - |
| Accounts Payable | - | 18.13 | -130.85 | 175.02 | -137.33 | 44.94 | -17.19 | 6.58 | -2.52 | 0.96 |
| Capital Expenditure | -25.49 | -36.43 | 42.12 | -62.89 | 19.50 | -7.46 | 2.85 | -1.09 | 0.42 | -0.16 |
| UFCF | 314.18 | 471.28 | 398.73 | 94.62 | 957 | -117.95 | 45.12 | -17.26 | 6.60 | -2.53 |
| WACC | ||||||||||
| PV UFCF | -103.45 | 34.71 | -11.65 | 3.91 | -1.31 | |||||
| SUM PV UFCF | -77.79 |
Terminal Value
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 14.02 |
| Free cash flow (t + 1) | -2.58 |
| Terminal Value | -21.44 |
| Present Value of Terminal Value | -11.13 |
Intrinsic Value
| Enterprise Value | -88.91 |
|---|---|
| Net Debt | 3,504 |
| Equity Value | -3,592.91 |
| Shares Outstanding | 117.23 |
| Equity Value Per Share | -30.65 |