Many stocks have been testing new highs in 2020, and one of the most notable is Starwood Property Trust Inc. (STWD). Currently, STWD is trading at $17.31 and the avg recommendation for the stock is Moderate Buy. while the current analyst price target stands at $17.43.
To add more color to this target, the company’s high over the last year is $26.33 and the low is $7.59. Over the last 52 weeks, STWD is down -34.26% while the S&P 500 is up 1.21%. The catalyst for this interesting swing was the company’s recent earnings report.
A Notable Earnings Report
In the last quarter, STWD reported a profit of $10.95 million. Starwood Property Trust Inc. also saw revenues increase to $312.56 million. In addition, STWD has free cash flow of $190.73 million as of 03-2020 The company’s EBITDA came in at $31.54 million which compares well with its peers.
STWD booked profit margins of 30.70%, its Return on Equity (ROE) is 8.00%, and its Return on Assets is 0.50%. All told, it is clear that, STWD needs to be on your watchlist.
About Starwood Property Trust Inc.
If readers are unfamiliar, Starwood Property Trust, Inc. operates as a real estate investment trust (REIT) in the United States and Europe. It operates through Commercial and Residential Lending, Infrastructure Lending, Property, and Investing and Servicing segments. The Commercial and Residential Lending segment originates, acquires, finances, and manages commercial and residential first mortgages, subordinated mortgages, mezzanine loans, preferred equity, commercial mortgage-backed securities (CMBS), residential mortgage-backed securities, and other real estate and real estate-related debt investments. The Infrastructure lending segment originates, acquires, finances, and manages infrastructure debt investments. The Property segment acquires and manages equity interests in commercial real estate properties, including multi-family properties. The Investing and Servicing segment manages and works out problem assets; acquires and manages unrated, investment grade, and non-investment grade rated CMBS, including subordinated interests of securitization and re-securitization transactions; originates conduit loans for the primary purpose of selling these loans into securitization transactions; and acquires commercial real estate assets, including properties acquired from CMBS trusts. The company qualifies as a REIT for federal income tax purposes and would not be subject to federal corporate income taxes, if it distributes at least 90% of its taxable income to its stockholders. Starwood Property Trust, Inc. was founded in 2009 and is headquartered in Greenwich, Connecticut.
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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. STWD has a short ratio of 2.18 and outstanding shares of 280.99M.
STWD has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 4.06 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 1.29. Investors should also keep an eye on sector updates as STWD has historically followed its peers on positive news.
All told, Starwood Property Trust Inc. STWD has strung together solid data and demonstrated underlying fundamentals. At its current valuation, STWD represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.
Starwood Property Trust Inc. STWD is now commanding a market cap of 4.72B and a float of 271.87M. STWD is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of STWD stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in STWD, either long or short, and we have not been compensated for this article.