WaFd (WAFD) Valuation Check After Recent 8% One-Month Share Price Gain

WaFd (WAFD) has quietly outperformed the broader regional bank space over the past month, gaining about 8% as investors reassess its steady revenue and net income growth against a mixed one year share performance.

See our latest analysis for WaFd.

At around $32.91 a share, WaFd’s recent 1 month share price return of roughly 8% sits against a softer 1 year total shareholder return. This suggests sentiment has started to thaw as investors reprice its earnings resilience.

If WaFd’s steady climb has you thinking about what else could rerate, it might be a good moment to explore fast growing stocks with high insider ownership for other under the radar opportunities.

Yet with shares now sitting slightly above analyst targets but still trading at a modest intrinsic discount, the key question becomes clear: is WaFd undervalued, or is the market already pricing in its future growth?

Price-to-Earnings of 11.9x: Is it justified?

On a headline basis, WaFd trades at a price-to-earnings ratio of 11.9x, which lines up closely with the broader US banks sector while still sitting below similar peers.

The price-to-earnings multiple compares the company’s current share price to its per share earnings. It provides a direct snapshot of how much investors are willing to pay for each dollar of profit. For a mature, steadily profitable bank like WaFd, this lens is particularly useful because earnings growth, return on equity, and capital discipline all feed straight into how sustainable that multiple looks over time.

Here, the market is paying roughly the same multiple as the wider US banks industry, at 11.9x, but less than the 14.4x average for WaFd’s closest peers. This implies investors are cautious about assigning it a premium despite its improving profit growth and expanding net margins. Against the estimated fair price-to-earnings ratio of 11.8x, the current 11.9x sits just above the level our regression based fair ratio suggests the market could gravitate toward if expectations normalize.

Explore the SWS fair ratio for WaFd

Result: Price-to-Earnings of 11.9x (ABOUT RIGHT)

However, a weaker credit cycle or sharper than expected funding cost pressures could quickly compress margins and challenge today’s earnings-based valuation comfort.

Find out about the key risks to this WaFd narrative.

Another View: What Our DCF Says

While the current price to earnings ratio suggests WaFd is about fairly valued, our DCF model points to a different story. It indicates fair value closer to $35.86 versus today’s $32.91. That 8.2% gap hints at modest upside, but is it enough to compensate for banking cycle risks?

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 901 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 see the story differently or want to dig into the numbers yourself, you can shape a custom view in minutes using 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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