Why Is Starwood Property Trust (STWD) Down 3.6% Since Last Earnings Report?

It has been about a month since the last earnings report for Starwood Property Trust (STWD). Shares have lost about 3.6% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Starwood Property Trust due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Starwood Property Q4 Earnings Beat Estimates, BVPS Declines Y/Y

Starwood Property reported fourth-quarter 2025 distributable earnings of 42 cents per share, which surpassed the Zacks Consensus Estimate of 41 cents. However, the reported figure compares unfavorably with 48 cents per share in the year-ago quarter.

Results were supported by a year-over-year increase in revenues and a higher cash balance. However, a decrease in book value per share and higher expenses remained headwinds.

The fourth-quarter 2025 net income (GAAP basis) was $96.9 million, which jumped 87.7% year over year.

For 2025, the company reported distributable earnings of $1.69 per share, which beat the Zacks Consensus Estimate of $1.68 per share. However, the reported figure compares unfavorably with $2.02 per share in the year-ago period. Net income was $411.5 million, up from $359.9 million in 2024.

Inside Starwood Property’s Headlines

The company’s total revenues were $492.9 million, up 8.5% year over year. Also, the top line surpassed the Zacks Consensus Estimate by 2.8%.

For 2025, total revenues were $1.8 billion, down 5.2% year over year. Nevertheless, the top line surpassed the Zacks Consensus Estimate by nearly 1%.

Total costs and expenses were $482.4 million, up nearly 1% from the prior-year quarter. The rise was primarily due to an increase in interest expense, general and administrative cost, rental operations cost, depreciation and amortization cost and other expenses.

Starwood Property’s BVPS (GAAP basis) was $18.34 as of Dec. 31, 2025, down 3.9% from $19.08 in the prior-year quarter.

The company recorded fundings of $2.2 billion, which increased from $1.6 billion in the prior-year quarter.

Starwood Property’s Balance Sheet Position

As of Dec. 31, 2025, cash and cash equivalents were $499.5 million, up 65.8% from the prior quarter.

Loans held for sale totaled $2.3 billion compared with $2.6 billion in the prior quarter.

Outlook

Q1 2026

The commercial real estate loan portfolio is expected to exceed $17 billion in the first quarter, up from $16.6 billion reported at Dec. 31, 2025.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in fresh estimates.

VGM Scores

Currently, Starwood Property Trust has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock has a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Starwood Property Trust has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

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STARWOOD PROPERTY TRUST, INC. (STWD): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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