Redwood Capital Bancorp (RWCB) AI Stock Analysis

• Market Cap: $51.69M
• Dividend Yield: 1.25%
• Average Volume (3M): 2.64K
• Price to Earnings (P/E): 11.0
• Beta (1Y): 0.09
• Revenue Growth: 3.18%
• EPS Growth: N/A
• Country: US
• Employees: 26
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.56
• Shares Outstanding: 1,904,000
• 10 Day Avg. Volume: 6,773
• 30 Day Avg. Volume: 2,641
• PEG Ratio: -0.31
• Price to Book (P/B): 0.82
• Price to Sales (P/S): 1.54
• P/FCF Ratio: 6.37
• Enterprise Value/Market Cap: 0.53
• Enterprise Value/Revenue: 1.04
• Enterprise Value/Gross Profit: 1.30
• Enterprise Value/Ebitda: 4.13
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 69 Neutral
• Price Target: ―

Redwood Capital Bancorp demonstrates strong financial performance with solid revenue growth and profitability, although the company faces challenges in cash flow stability. The current valuation presents an attractive opportunity, with a low P/E ratio and a solid dividend yield. Technical indicators are mixed, suggesting caution in the short term. Overall, the stock presents a promising investment, particularly for value investors, despite some operational and market uncertainties.

Redwood Capital Bancorp Business Overview & Revenue Model

Company Description

Redwood Capital Bancorp operates as the bank holding company for Redwood Capital Bank that provides various banking products and services to individuals and businesses in California. The company accepts checking, savings, and money market accounts, as well as certificates of deposit. It also offers real estate loans, home equity lines of credit, construction and development loans, term loans for machinery and equipment, and lines of credit for working capital, as well as industrial, agricultural, and personal credits. In addition, the company provides credit and debit cards, re-order checks, and online and mobile banking services. It serves clients through its branches located in Eureka, Fortuna, and Arcata, California. The company was founded in 2004 and is based in Eureka, California.

How the Company Makes Money

Redwood Capital Bancorp generates revenue primarily through its banking operations, which include interest income from loans and investment securities, and non-interest income from service charges, fees, and other financial services. The interest income is derived from lending activities, such as commercial and residential loans, where the company earns money from the interest paid by borrowers. Non-interest income is generated through various banking services, including account maintenance fees, transaction fees, and other ancillary services. The company may also engage in strategic partnerships with other financial institutions, contributing to its revenue through collaborative financial products or services.

Redwood Capital Bancorp Financial Statement Overview

Summary

Overall, Redwood Capital Bancorp displays strong financial health with solid revenue growth and profitability. The balance sheet reflects careful debt management but shows a rising reliance on liabilities. Cash flow management shows some volatility, which could impact long-term strategic initiatives. The company is well-positioned but should focus on enhancing operational efficiencies and stabilizing cash flow patterns for sustained performance.

Income Statement

Redwood Capital Bancorp has shown robust growth in revenue, increasing from $17.41 million in 2019 to $23.48 million in 2023, reflecting strong revenue momentum. The company maintains a healthy Net Profit Margin, rising from 23.64% in 2019 to 30.00% in 2023, indicating effective cost management and profitability. The Gross Profit Margin is similarly strong, supporting consistent earnings quality. However, there is room for improvement in operational efficiency, as the EBIT and EBITDA margins could be optimized further.

Balance Sheet

The balance sheet of Redwood Capital Bancorp is solid with a stable equity base growing from $31.05 million in 2019 to $45.71 million in 2023. The Debt-to-Equity ratio remains low, highlighting prudent leverage management. The Return on Equity has improved, indicating better returns on investments. However, the Equity Ratio has seen a decline, suggesting an increasing reliance on liabilities, which could pose future risks if not managed carefully.

Cash Flow

Cash flow analysis reveals fluctuating Free Cash Flow, with a noticeable decline in 2023 from 2022, which requires attention to preserve liquidity. The Operating Cash Flow to Net Income ratio indicates efficient cash generation relative to earnings, but the Free Cash Flow Growth Rate has been inconsistent. This volatility in cash flow could affect financial flexibility and long-term investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	26.57M	26.98M	23.67M	21.00M	19.68M	17.16M
Gross Profit	21.12M	21.58M	23.67M	20.76M	19.38M	16.81M
EBITDA	6.67M	7.23M	10.29M	8.99M	8.68M	7.04M
Net Income	4.83M	5.27M	7.04M	6.02M	5.59M	4.41M
Balance Sheet
Total Assets	549.82M	531.80M	521.44M	525.15M	596.07M	495.94M
Cash, Cash Equivalents and Short-Term Investments	25.68M	0.00	20.41M	107.72M	163.91M	78.81M
Total Debt	5.00M	5.20M	11.00M	11.00M	11.00M	9.00M
Total Liabilities	496.12M	481.23M	475.73M	486.51M	555.90M	460.26M
Stockholders Equity	53.71M	50.57M	45.71M	38.64M	40.18M	35.68M
Cash Flow
Free Cash Flow	0.00	6.50M	4.42M	7.28M	11.32M	1.38M
Operating Cash Flow	0.00	6.69M	7.72M	7.49M	11.96M	1.52M
Investing Cash Flow	0.00	5.23M	-10.49M	-64.36M	-11.74M	-85.94M
Financing Cash Flow	0.00	4.46M	-12.78M	-70.83M	94.56M	121.92M

Redwood Capital Bancorp Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 27.51
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RWCB, the sentiment is Positive. The current price of 27.51 is above the 20-day moving average (MA) of 26.53, above the 50-day MA of 25.37, and above the 200-day MA of 22.89, indicating a bullish trend. The MACD of 0.68 indicates Negative momentum. The RSI at 65.43 is Neutral, neither overbought nor oversold. The STOCH value of 69.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RWCB.

Redwood Capital Bancorp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RWCB	69 Neutral	$51.69M	11.04	9.52%	1.25%	3.18%	―
ASRV	68 Neutral	$48.07M	13.00	3.45%	4.01%	6.06%	―
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
CLST	57 Neutral	$54.84M	23.66	2.69%	―	107.33%	―
TCBS	55 Neutral	$47.87M	20.58	4.50%	0.99%	13.47%	―