Assessing Starwood Property Trust (STWD)’s Valuation After Its Recent Three-Month Share Price Pullback

Starwood Property Trust (STWD) has quietly outpaced many income names over the past 5 years, and its recent 3 month pullback now has dividend focused investors rechecking the risk reward tradeoff.

See our latest analysis for Starwood Property Trust.

Zooming out, the share price has eased back to about $18.43 after a 90 day share price return of roughly negative 9 percent. However, a 5 year total shareholder return of just over 50 percent suggests long term income focused holders have still been well rewarded, which hints that recent weakness looks more like fading momentum than a broken story.

If Starwood’s pullback has you thinking about where else income and value might be hiding, this could be a good time to explore fast growing stocks with high insider ownership.

With Starwood trading at a double digit discount to both analyst targets and intrinsic value estimates despite solid revenue and income growth, investors face a key question: Is this a mispriced yield play, or is the market already discounting future risks and slower growth?

Most Popular Narrative: 15.7% Undervalued

With Starwood Property Trust last closing at $18.43 against a narrative fair value near $21.86, the spread reflects ambitious expectations for its income engine.

The acquisition and ramp up of the net lease portfolio (Fundamental Income), combined with ongoing infrastructure lending growth, position Starwood to generate high quality, durable earnings streams across a more diversified asset base, supporting both net margin expansion and greater earnings consistency.

Read the complete narrative.

Curious how fast growing revenues, shifting margins, and a richer future earnings multiple all fit together into that valuation gap? The full narrative unpacks every assumption.

Result: Fair Value of $21.86 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sizable nonaccrual assets and persistent pressure in office linked loans could still undermine earnings visibility and challenge that undervaluation thesis.

Find out about the key risks to this Starwood Property Trust narrative.

Another Lens on Value

Not everyone sees Starwood as a clear bargain. On a price to earnings basis it trades at 19.1 times, richer than both the Mortgage REITs industry at 13.2 times and peers at 15.7 times, and above a 13.8 times fair ratio, which hints at valuation risk if growth stumbles.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Starwood Property Trust Narrative

If this view does not fully match your own or you prefer to dig into the numbers yourself, you can build a fresh narrative in just a few minutes, Do it your way.

A great starting point for your Starwood Property Trust research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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