Redwood Trust Plunges 17.87% on Earnings Miss

Redwood Trust's stock price plummeted by 17.87% in pre-market trading on May 1, 2025, marking a significant decline for the specialty finance company.

Redwood Trust reported quarterly earnings of $0.14 per share for the first quarter of 2025, falling short of the Zacks Consensus Estimate of $0.17 per share. This earnings miss represents a -17.65% earnings surprise, following a similar miss in the previous quarter. The company's revenue for the quarter was $27.9 million, which also missed the consensus estimate by 10.89%.

Redwood Trust has struggled to meet earnings and revenue expectations in recent quarters, which has contributed to the recent decline in its stock price. The company's earnings have missed estimates in three of the last four quarters, and its revenue has only exceeded estimates once in the same period. The sustainability of the stock's price movement will largely depend on management's commentary during the earnings call and future earnings expectations.

Despite the recent decline, Redwood Trust's stock has outperformed the broader market this year, with a loss of about 4.8% compared to the S&P 500's decline of -5.5%. However, the company's earnings outlook remains uncertain, and investors will be closely watching for any changes in earnings estimate revisions in the coming days. The current consensus EPS estimate for the coming quarter is $0.20 on $30.55 million in revenues, and $0.82 on $126.96 million in revenues for the current fiscal year.