Value
6.0/10data confidence 50%| Component | Sub-score |
|---|---|
| P/S | 2.9 |
| p ocf | 9.1 |
| Analyst target | 6.0 |
- ▸P/OCF: 7.5x (FFO proxy — REITs gated off P/E)
STWD · Why this verdict
Why STARWOOD PROPERTY TRUST, INC. S (STWD) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company reported 22% year-over-year earnings growth with a strong Piotroski F-Score of 8 out of 9, suggesting broad-based financial health improvements across profitability, leverage, and efficiency signals despite mixed recent quarterly results. Growth breakdown | Year-over-year earnings growth remains above 10% over the next 12 months, demonstrating that the 22% growth rate is not a one-quarter anomaly. | →Stable |
| CounterWith 2 beats and 2 misses in the last 4 quarters and the most recent quarter missing by 50%, the growth trajectory may already be decelerating from the reported pace. | ||
Power sector loans represent 56.9% of the loan portfolio, creating a single-sector concentration that exposes the mortgage REIT to correlated credit risk if power markets experience stress or interest rate changes affect refinancing capacity. Bear case | Power sector loans fall below 45% of the total loan portfolio within 12 months as new originations diversify the book. | →Stable |
| CounterPower infrastructure has been a strong credit performer given structural demand from data centers and energy transition; concentrated exposure to a growing sector may represent a deliberate strategic advantage rather than a risk. | ||
The stock has a death cross with a flat 200-day moving average slope, falling on-balance volume, and RSI near 35, indicating sustained technical selling pressure that has not yet found a floor. Momentum breakdown | Price stabilizes above $16 support and RSI recovers above 45 within 12 months, indicating selling pressure has been absorbed. | →Stable |
| CounterAs a mortgage REIT, the stock is highly sensitive to interest rate expectations; a shift toward rate cuts could rapidly reverse momentum without any change in company fundamentals. | ||
Recent news has triggered a negative modifier and the dividend payout ratio stands at an elevated 1,141% of earnings, indicating the current dividend may not be supported by earnings and could be at risk of reduction. Catalyst breakdown | The dividend payout ratio falls below 500% of net income within 12 months as earnings improve or the dividend is recalibrated to a sustainable level. | →Stable |
| CounterMortgage REITs typically pay dividends from distributable earnings rather than GAAP net income, and a high GAAP payout ratio may overstate the true distribution risk if operating cash flows are adequate. | ||
The company reported 22% year-over-year earnings growth with a strong Piotroski F-Score of 8 out of 9, suggesting broad-based financial health improvements across profitability, leverage, and efficiency signals despite mixed recent quarterly results.
→StableGrowth breakdown
- Expectation
- Year-over-year earnings growth remains above 10% over the next 12 months, demonstrating that the 22% growth rate is not a one-quarter anomaly.
CounterWith 2 beats and 2 misses in the last 4 quarters and the most recent quarter missing by 50%, the growth trajectory may already be decelerating from the reported pace.
Power sector loans represent 56.9% of the loan portfolio, creating a single-sector concentration that exposes the mortgage REIT to correlated credit risk if power markets experience stress or interest rate changes affect refinancing capacity.
→StableBear case
- Expectation
- Power sector loans fall below 45% of the total loan portfolio within 12 months as new originations diversify the book.
CounterPower infrastructure has been a strong credit performer given structural demand from data centers and energy transition; concentrated exposure to a growing sector may represent a deliberate strategic advantage rather than a risk.
The stock has a death cross with a flat 200-day moving average slope, falling on-balance volume, and RSI near 35, indicating sustained technical selling pressure that has not yet found a floor.
→StableMomentum breakdown
- Expectation
- Price stabilizes above $16 support and RSI recovers above 45 within 12 months, indicating selling pressure has been absorbed.
CounterAs a mortgage REIT, the stock is highly sensitive to interest rate expectations; a shift toward rate cuts could rapidly reverse momentum without any change in company fundamentals.
Recent news has triggered a negative modifier and the dividend payout ratio stands at an elevated 1,141% of earnings, indicating the current dividend may not be supported by earnings and could be at risk of reduction.
→StableCatalyst breakdown
- Expectation
- The dividend payout ratio falls below 500% of net income within 12 months as earnings improve or the dividend is recalibrated to a sustainable level.
CounterMortgage REITs typically pay dividends from distributable earnings rather than GAAP net income, and a high GAAP payout ratio may overstate the true distribution risk if operating cash flows are adequate.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Starwood Property Trust reported 22% year-over-year earnings growth with a strong Piotroski F-Score of 8 out of 9, but the loan portfolio is 56.9% concentrated in power sector loans, momentum is negative with a death cross, and recent news has turned negative, compressing the investment case.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.8 |
| ROA | 0.4 |
| Gross margin | 10.0 |
| Op margin | 7.0 |
| Net margin | 10.0 |
| Current ratio | 5.0 |
| Moat | 6.4 |
| Piotroski F | 8.9 |
- ▸Strong margins: 60%
- ▸Strong Piotroski F-Score: 8/9
Growth
8.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.9 |
| EPS growth | 10.0 |
- ▸Strong growth: 22% YoY
Momentum
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 6.8 |
| OBV | 1.4 |
| MA position | 4.0 |
| Volume | 3.3 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -1.4%/30d — confirmed downtrend
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.8 |
| Price target | 8.0 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (8.0) — signal dampened
- ▸Analyst upside: 23%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.6 |
| quality rank | 4.8 |
| growth rank | 6.9 |
Technical
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.6 |
| support resistance | 4.1 |
| 52w position | 7.4 |
| gap | 5.0 |
Risk (lower is worse)
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.5 |
| days to cover | 5.0 |
| volatility | 8.8 |
| put call | 0.0 |
| implied vol | 6.1 |
| beta | 6.9 |
| debt equity | 1.8 |
- ▸Elevated put/call: 5.40
- ▸Concentration risks: 3 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 5.2 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend: 1165.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier -1 (HOLD_IF_HOLDING → SELL_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=-1Passed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:33d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:4.0<4.5
- ASYMMETRY:1.4<1.5@spot
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
1.38
Upside
+6.9%
Downside
5.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 51
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: INSIDER:OK. Top dim: Growth at 8.9; weakest: Catalyst at 3.7. No conviction either direction.
The strongest dimensions are Growth at 8.9, Sentiment at 6.7, and Quality at 6.2; the weakest are Catalyst at 3.7, Momentum at 4.0, and Peer rank at 4.3. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 1.38 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Earnings Growth
Trip ifEPS surprise falls below 0% in at least 3 of the next 4 quarters, confirming that earnings growth has reversed.
- P2Power Sector Loan Concentration
Trip ifPower sector loans rise above 65%, exceeding the current 56.9% concentration and increasing single-sector exposure further.
- P3Death Cross Momentum Deterioration
Trip ifPrice drops below $15, more than 10% below the current $16.82, confirming the breakdown through current support.
- P4Negative News Dividend Sustainability
Trip ifDividend is cut by more than 20%, reducing the quarterly payment below 80% of its current level.