Is WaFd (WAFD) Fairly Valued After Its Recent Share Price Rebound?

WaFd (WAFD) shares have been on the move recently, catching the eye of investors curious about regional banks. The company has posted steady annual growth in both revenue and net income. This has prompted some to review its longer-term performance.

See our latest analysis for WaFd.

After a rough patch earlier this year, WaFd’s share price has started to regain some ground. A 7.3% rise over the past month has added to recent momentum. However, the past year’s total shareholder return remains negative at -11%, suggesting that investor confidence is only just starting to rebuild following recent volatility.

If WaFd’s rebound has you rethinking what’s possible in banking, now is a good time to broaden your watchlist and discover fast growing stocks with high insider ownership

With steady performance but only a modest rebound, the key question becomes whether WaFd’s current share price reflects its true value or if lingering pessimism could signal an overlooked buying opportunity for investors seeking future growth.

Price-to-Earnings of 11.5x: Is it justified?

WaFd is currently trading at a price-to-earnings (P/E) ratio of 11.5x, slightly above the US Banks industry average of 11.2x. At its last close of $31.73, this signals the market is placing a modest premium on WaFd's earnings relative to sector peers.

The P/E ratio measures how much investors are willing to pay per dollar of a company's earnings. For banks, it is a widely used yardstick for comparing profitability prospects and market expectations within the sector. A higher P/E can suggest optimism about future growth or underlying financial strength. A lower ratio may indicate skepticism or sector-specific risks.

Despite this premium, WaFd's earnings growth over the last year (14%) did not surpass the industry, and its return on equity (7.4%) is considered low. Compared to its peer average P/E of 13.4x, WaFd actually screens as a better relative value versus direct competitors. However, when measured against its fair price-to-earnings level of 11.1x, the current market premium could come under pressure as expectations realign toward more sustainable growth rates and profitability benchmarks.

Explore the SWS fair ratio for WaFd

Result: Price-to-Earnings of 11.5x (ABOUT RIGHT)

However, weaker-than-expected earnings or renewed volatility in regional banks could quickly dampen WaFd's improving investor sentiment.

Find out about the key risks to this WaFd narrative.

Another View: What Does the SWS DCF Model Say?

Looking at WaFd through the lens of the SWS DCF model offers a different perspective. The discounted cash flow calculation suggests WaFd could be undervalued, trading about 11% below its estimated fair value of $35.82 per share. Could this hint at untapped upside that standard ratios might overlook?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out WaFd for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 928 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own WaFd Narrative

If you have your own take on WaFd’s numbers or prefer to dig into the data first-hand, you can shape your own perspective in just a few minutes. Do it your way

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding WaFd.

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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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