Walker & Dunlop (WD): Revisiting Valuation After a Steep 1-Month and 1-Year Share Price Decline

Walker & Dunlop (WD) has had a rough stretch recently, with the stock down about 21% over the past month and nearly 40% over the past year, raising questions about whether sentiment has overshot fundamentals.

See our latest analysis for Walker & Dunlop.

The latest slide, including a roughly 21% 30 day share price return and a 39.8% one year total shareholder return decline, suggests momentum is clearly fading as investors reassess commercial real estate risks and near term earnings power.

If Walker & Dunlop’s recent pullback has you rethinking your exposure to property linked names, this could be a useful moment to explore fast growing stocks with high insider ownership.

With shares now trading well below analyst targets despite double digit revenue and earnings growth, the key question is simple: is Walker & Dunlop being mispriced, or is the market already discounting its future recovery?

Most Popular Narrative Narrative: 31.6% Undervalued

With Walker & Dunlop last closing at $63.23 versus a narrative fair value of $92.50, the current share price sits well below projected fundamentals.

The structural shortage and unaffordability of single family housing, along with record apartment absorption and high multifamily occupancy (96%), are expected to drive up rents and property values, leading to increased demand for multifamily financing, higher origination fees, and a larger servicing portfolio all supporting both revenue and earnings expansion.

Read the complete narrative.

Curious how this play on housing shortages, scaling margins, and richer earnings power turns into that valuation gap? The narrative’s math may surprise you.

Result: Fair Value of $92.50 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, shifting office demand and prolonged rate volatility could curb deal activity, squeeze margins, and delay the earnings and valuation recovery investors are banking on.

Find out about the key risks to this Walker & Dunlop narrative.

Another Angle on Valuation

Analysts see upside to $92.50, but our fair ratio work tells a tougher story. At 19.2 times earnings versus a 17.2 fair ratio, 13.8 for the industry and 8.8 for peers, Walker & Dunlop screens expensive, not cheap. This raises the question: who is right here?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Walker & Dunlop Narrative

If this take does not quite fit your view, or you would rather dig into the numbers yourself, you can build a custom narrative in just a few minutes, starting with Do it your way.

A great starting point for your Walker & Dunlop research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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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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