WallStSmart

Annaly Capital Management, Inc. (NLY)vsRedwood Trust Inc (RWT)

VS

Smart Verdict

WallStSmart Research — data-driven comparison

Annaly Capital Management, Inc. generates 1394% more annual revenue ($2.50B vs $167.46M). NLY leads profitability with a 87.4% profit margin vs -54.7%. RWT appears more attractively valued with a PEG of 1.47. NLY earns a higher WallStSmart Score of 77/100 (B+).

NLY

Strong Buy

77

out of 100

Grade: B+

Growth: 9.3Profit: 7.5Value: 4.7Quality: 2.5
Piotroski: 3/9Altman Z: -0.56

RWT

Hold

39

out of 100

Grade: F

Growth: 3.0Profit: 2.0Value: 7.0Quality: 3.0
Piotroski: 4/9Altman Z: 0.00
IV

Intrinsic Value Comparison

Multi-model valuation · Graham Formula

NLYSignificantly Overvalued (-37.9%)

Margin of Safety

-37.9%

Fair Value

$16.54

Current Price

$21.22

$4.68 premium

UndervaluedFair: $16.54Overvalued
RWTUndervalued (+37.4%)

Margin of Safety

+37.4%

Fair Value

$10.70

Current Price

$5.33

$5.37 discount

UndervaluedFair: $10.70Overvalued

Key Strengths & Concerns

Side-by-side fundamental analysis

Key Strengths

NLY6 strengths · Avg: 10.0/10
P/E RatioValuation
7.1x10/10

Attractively priced relative to earnings

Price/BookValuation
1.1x10/10

Reasonable price relative to book value

Profit MarginProfitability
87.4%10/10

Keeps 87 of every $100 in revenue as profit

Operating MarginProfitability
81.0%10/10

Strong operational efficiency at 81.0%

Revenue GrowthGrowth
48.8%10/10

Revenue surging 48.8% year-over-year

EPS GrowthGrowth
122.5%10/10

Earnings expanding 122.5% YoY

RWT1 strengths · Avg: 10.0/10
Price/BookValuation
0.7x10/10

Reasonable price relative to book value

Areas to Watch

NLY4 concerns · Avg: 2.3/10
Piotroski F-ScoreQuality
3/93/10

Weak financial health signals

PEG RatioValuation
32.032/10

Expensive relative to growth rate

Free Cash FlowQuality
$-1.90B2/10

Negative free cash flow — burning cash

Altman Z-ScoreHealth
-0.562/10

Distress zone — elevated risk

RWT4 concerns · Avg: 2.3/10
Market CapQuality
$637.35M3/10

Smaller company, higher risk/reward

Return on EquityProfitability
-9.6%2/10

ROE of -9.6% — below average capital efficiency

Revenue GrowthGrowth
-13.4%2/10

Revenue declined 13.4%

EPS GrowthGrowth
-52.6%2/10

Earnings declined 52.6%

Comparative Analysis Report

WallStSmart Research

Bull Case : NLY

The strongest argument for NLY centers on P/E Ratio, Price/Book, Profit Margin. Profitability is solid with margins at 87.4% and operating margin at 81.0%. Revenue growth of 48.8% demonstrates continued momentum.

Bull Case : RWT

The strongest argument for RWT centers on Price/Book. PEG of 1.47 suggests the stock is reasonably priced for its growth.

Bear Case : NLY

The primary concerns for NLY are Piotroski F-Score, PEG Ratio, Free Cash Flow. Debt-to-equity of 7.18 is elevated, increasing financial risk.

Bear Case : RWT

The primary concerns for RWT are Market Cap, Return on Equity, Revenue Growth. Debt-to-equity of 26.42 is elevated, increasing financial risk.

Key Dynamics to Monitor

NLY profiles as a growth stock while RWT is a turnaround play — different risk/reward profiles.

RWT carries more volatility with a beta of 1.42 — expect wider price swings.

NLY is growing revenue faster at 48.8% — sustainability is the question.

NLY generates stronger free cash flow (-1.9B), providing more financial flexibility.

Bottom Line

NLY scores higher overall (77/100 vs 39/100), backed by strong 87.4% margins and 48.8% revenue growth. RWT offers better value entry with a 37.4% margin of safety. Both earn "Strong Buy" and "Hold" ratings respectively — the choice depends on your investment horizon and risk tolerance.

This analysis is generated from publicly available financial data. Not financial advice.

Annaly Capital Management, Inc.

REAL ESTATE · REIT - MORTGAGE · USA

Annaly Capital Management, Inc., a diversified capital manager, invests in and finances residential and commercial assets. The company is headquartered in New York, New York.

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Redwood Trust Inc

REAL ESTATE · REIT - MORTGAGE · USA

Redwood Trust, Inc., is a specialized finance company in the United States. The company is headquartered in Mill Valley, California.

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