Education
About Us
Working with TipRanks
Follow Us
Starwood Property (STWD)
NYSE:STWD
Top Page
Starwood Property
(NYSE:STWD)74Outperform
Positive Factors
Financial Performance
Starwood Property Trust has raised nearly $1.3 billion of incremental capital, which will allow the company to fund new investments and retire $900 million of unsecured notes that mature soon.
Investment Capacity
The company remains the most active originator in its coverage with ample investment capacity to take advantage of its strongest deal pipeline since early 2022.
Negative Factors
Credit Trends
Credit trends worsened slightly with an increase in risk-rated 4 & 5 loans and CECL reserves.
Starwood Property (STWD) vs. S&P 500 (SPY)
Market Cap
$6.70B
Dividend Yield9.66%
Average Volume (3M)2.02M
Price to Earnings (P/E)18.1
Beta (1Y)1.07
Revenue Growth-0.97%
EPS Growth3.75%
CountryUS
Employees293
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)1.10
Shares Outstanding337,423,550
10 Day Avg. Volume2,316,615
30 Day Avg. Volume2,017,754
Financial Highlights & Ratios
PEG Ratio4.82
Price to Book (P/B)N/A
Price to Sales (P/S)6.67
Price to Cash Flow (P/CF)5.80
P/FCF Ratio5.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$21.90Price Target Upside8.85% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Starwood Property Business Overview & Revenue Model
Company DescriptionStarwood Property Trust, Inc. engages in originating, acquiring, financing, and managing commercial mortgage loans and other commercial real estate debt and equity investments. It operates through the following segments: Real Estate Commercial and Residential Lending; Real Estate Property; Infrastructure Lending; and Real Estate Investing and Servicing. The Real Estate Commercial and Residential Lending segment includes commercial first and subordinated mortgages, mezzanine loans, preferred equity, certain residential mortgage loans, and other real estate debt investments. The Real Estate Property segment consists of acquisition and managing equity interests in stabilized commercial real estate properties, such as multi-family properties, that are held for investment. The Infrastructure Lending Segment engages primarily in originating, acquiring, financing and managing infrastructure debt investments. The Real Estate Investing and Servicing comprises servicing business that manages and works out problem assets; investment business that selectively acquires and manages unrated, investment grade, and non-investment grade; mortgage loan business which originates conduit loans for the primary purpose of selling loans into securitization transactions; and an investment business that selectively acquires commercial real estate assets. The company was founded on August 17, 2009 and is headquartered in Greenwich, CT.
How the Company Makes MoneyStarwood Property Trust primarily generates revenue through interest income from its extensive portfolio of commercial and residential loans, which include first mortgages, subordinated mortgages, and mezzanine loans. The company also earns income from real estate investments by acquiring and managing properties, which contribute to rental and leasing revenues. Additionally, Starwood Property Trust's infrastructure lending segment provides financing solutions for infrastructure projects, further diversifying its revenue streams. The company benefits from strategic partnerships, strong industry relationships, and a robust asset management platform, all of which enhance its ability to generate consistent earnings. Its diversified investment strategy and active management of its portfolio allow Starwood Property Trust to optimize returns and mitigate risks, contributing to its overall financial performance.
Starwood Property Financial Statement Overview
Summary
Starwood Property shows strong revenue growth and profitability, a stable balance sheet with low leverage, and healthy cash flow. However, attention is needed for fluctuations in financing activities.Income Statement
Starwood Property has shown a strong revenue growth trajectory, with a significant increase from $1.02 billion in 2023 to $1.95 billion in 2024. The gross profit margin is excellent at 100% for both years. Net profit margin improved from 33.38% in 2023 to 18.48% in 2024, indicating strong profitability. However, EBIT and EBITDA margins are also strong, signaling efficient operations. The revenue growth rate is impressive, contributing to a high score.75
Positive
Balance Sheet
The company has a robust balance sheet with zero total debt in 2024, significantly improving the debt-to-equity ratio. The equity ratio has remained stable. Return on equity decreased slightly from 2023 to 2024, indicating a need for further efficiency improvements. Overall, the balance sheet reflects stability and low leverage risk.70
Positive
Cash Flow
Starwood Property displays strong operating cash flow, with a significant increase in free cash flow from 2023 to 2024. The free cash flow to net income ratio suggests effective cash management. However, fluctuations in cash flow from financing activities require monitoring. The free cash flow growth rate is positive, contributing to a stable cash flow position.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.95B | 1.02B | 1.45B | 885.14M | 822.44M | Gross Profit |
| 1.95B | 777.18M | 1.41B | 773.48M | 704.76M | EBIT |
| 1.75B | 2.55M | 1.78B | 456.41M | 351.89M | EBITDA |
| 1.72B | 54.24M | 1.55B | 0.00 | 0.00 | Net Income Common Stockholders |
| 359.93M | 339.21M | 871.48M | 447.74M | 331.69M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 911.09M | 258.10M | 18.66B | 217.36M | 563.22M | Total Assets |
| 62.56B | 69.50B | 79.04B | 83.85B | 80.87B | Total Debt |
| 9.01B | 8.87B | 21.83B | 17.02B | 7.00B | Net Debt |
| 8.63B | 8.67B | 21.57B | 16.80B | 6.44B | Total Liabilities |
| 55.36B | 62.48B | 71.84B | 77.20B | 76.01B | Stockholders Equity |
| 6.44B | 6.25B | 6.46B | 6.07B | 4.49B |
| Cash Flow | Free Cash Flow | |||
| 646.59M | 503.51M | 188.52M | -1.02B | 1.02B | Operating Cash Flow |
| 646.59M | 528.60M | 213.74M | -989.98M | 1.05B | Investing Cash Flow |
| 2.08B | 855.07M | -2.95B | -4.28B | -911.80M | Financing Cash Flow |
| -2.49B | -1.45B | 2.80B | 4.87B | 13.28M |
Starwood Property Technical Analysis
Positive
20.12
Price Trends
19.39
Positive
19.39
Positive
19.06
Positive
Market Momentum
0.21
Positive
56.98
Neutral
31.18
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STWD, the sentiment is Positive. The current price of 20.12 is above the 20-day moving average (MA) of 19.89, above the 50-day MA of 19.39, and above the 200-day MA of 19.06, indicating a bullish trend. The MACD of 0.21 indicates Positive momentum. The RSI at 56.98 is Neutral, neither overbought nor oversold. The STOCH value of 31.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STWD.
Starwood Property Risk Analysis
Starwood Property disclosed 108 risk factors in its most recent earnings report. Starwood Property reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Starwood Property Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $6.70B | 18.06 | 5.59% | 9.66% | -0.97% | 3.75% | |
69 Neutral | $738.82M | 56.90 | 2.50% | 9.33% | -10.24% | ― | |
68 Neutral | $1.47B | 13.46 | 7.05% | 7.94% | -5.09% | 6.25% | |
63 Neutral | $682.05M | 11.27 | 6.45% | 11.29% | -10.05% | ― | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% | |
61 Neutral | $1.38B | ― | -6.38% | 12.07% | -9.71% | -426.57% | |
60 Neutral | $3.45B | ― | -5.39% | 10.85% | -12.86% | -182.05% |
* Real Estate Sector Average
Performance Comparison
STWD
Starwood Property
20.12
1.75
9.53%
ARI
Apollo Real Estate
9.98
0.35
3.63%
BXMT
Blackstone Mortgage
20.04
2.44
13.86%
LADR
Ladder Capital
11.64
1.71
17.22%
KREF
Kkr Real Estate Finance
10.80
2.01
22.87%
TRTX
Tpg Re Finance
8.48
2.02
31.27%
Starwood Property Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: 0.70% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong liquidity position, record securitizations, and increased earnings, which demonstrate resilience and strategic execution. However, challenges in multifamily loans and the life sciences sector indicate areas of concern. Overall, the positive highlights, including significant liquidity and securitization achievements, outweigh the lowlights.Highlights
Strong Liquidity and Low Leverage
Starwood Property Trust has a liquidity position of $1.8 billion and a low adjusted debt to undepreciated equity ratio of 2.1 times, the lowest level in over four years.
Record Securitizations in Real Estate Investment Segment
The company completed 17 securitizations totaling approximately $1.6 billion in 2024, the highest level since 2016.
Increase in Distributable Earnings
Distributable earnings for the year were $675 million or $2.02 per share, which reflects a strong performance across various business segments.
Positive Developments in Infrastructure Lending
Infrastructure lending reached its highest annual level to date with $1.4 billion in new loan commitments.
Expansion in Special Servicing
Starwood's named servicing portfolio ended the year at $110 billion, the highest level in a decade.
Lowlights
Foreclosures and Loan Losses
Foreclosed on three multifamily loans totaling $190 million and took a $15 million specific CECL reserve against one loan.
Challenges in Multifamily Loans
Late cycle multifamily loans are anticipated to be the hardest hit due to forward interest rates, with some loans currently under stress.
Life Science Sector Difficulties
Life Science sector facing challenges due to oversupply, with one loan under review due to difficulties in securing leases.
Company Guidance
In the recent earnings call, Starwood Property Trust, Inc. provided several key metrics and guidance for the future. The company reported distributable earnings of $167 million, or $0.48 per share for the quarter, and $675 million, or $2.02 per share for the year. They committed $1.6 billion towards new investments in the quarter and $5.1 billion for the full year, with 67% of annual investing in businesses other than commercial lending. The company's commercial and residential lending segments contributed $193 million in distributable earnings for the quarter, with commercial lending originations totaling $477 million. The company also completed five securitizations totaling $595 million in the quarter. Starwood's infrastructure lending segment contributed $22 million in distributable earnings, with $532 million in new loan commitments. The company executed $2.3 billion in debt transactions during the quarter, maintaining a strong liquidity position with $1.8 billion available. Their leverage remains low, with an adjusted debt to undepreciated equity ratio of 2.1 times. Looking ahead, Starwood plans to increase its investing pace, with $1.5 billion of loans already closed in the first quarter of 2025. The company also aims to reduce its legacy non-accrual and REO assets significantly by 2027, while continuing to grow its diverse business model and maintain low leverage.Starwood Property Corporate Events
Private Placements and Financing
Starwood Property Trust Announces $400M Notes Offering
Neutral
Dec 17, 2024
Starwood Property Trust announced a private offering of $400 million in unsecured senior notes due in 2030, aimed at financing or refinancing green and social projects. The proceeds will initially be used to repay existing debt due in 2024, with the offering restricted to qualified institutional buyers and non-U.S. persons under specific regulations.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.