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Washington Federal
(NASDAQ:WAFD)
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Rating:65Neutral
Price Target:
$32.00
â–¼(-11.65% Downside)
Action:Reiterated
Date:09/08/26
The score is driven primarily by solid financial performance and cash-flow support for earnings, plus supportive valuation (11.1 P/E and ~3.0% yield). Offsetting these positives are weaker near-term technical signals and fundamental watch items highlighted in the earnings update (deposit pressure and modest credit deterioration), while the EverBank merger adds upside potential alongside integration and approval risk.
Positive Factors
Strong cash generation
Healthy operating and free cash flow indicate that reported earnings are broadly supported by cash generation. This provides internal funding capacity for lending growth, capital needs, and shareholder distributions while reducing reliance on external financing over the next several quarters.
Negative Factors
Deposit outflows and funding pressure
Deposit contraction and stronger competition can raise funding costs and reduce the availability of low-cost balances. Because net interest income depends on the spread between loan yields and funding expense, persistent deposit pressure could constrain margin expansion and earnings durability.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Healthy operating and free cash flow indicate that reported earnings are broadly supported by cash generation. This provides internal funding capacity for lending growth, capital needs, and shareholder distributions while reducing reliance on external financing over the next several quarters.
Read all positive factors
Washington Federal (WAFD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.18B
Dividend Yield3.67%
Average Volume (3M)1.29M
Price to Earnings (P/E)9.0
Beta (1Y)0.69
Revenue Growth-4.62%
EPS Growth21.13%
CountryUS
Employees1,979
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)3.27
Shares Outstanding74,011,520
10 Day Avg. Volume1,236,118
30 Day Avg. Volume1,294,521
Financial Highlights & Ratios
PEG Ratio2.05
Price to Book (P/B)0.80
Price to Sales (P/S)1.72
P/FCF Ratio11.66
Enterprise Value/Market Cap2.65
Enterprise Value/Revenue4.16
Enterprise Value/Gross Profit7.59
Enterprise Value/Ebitda17.01
Forecast
1Y Price Target
$36.33Price Target Upside0.31% Upside
Rating ConsensusHold
Number of Analyst Covering3
EPS Forecast (FY)3.52
Revenue Forecast (FY)$822.34M
Washington Federal Business Overview & Revenue Model
Company Description
WaFd, Inc. delivers a comprehensive suite of banking and financial services, encompassing lending, deposit accounts, and insurance, primarily catering to individual consumers. Beyond retail banking, the company also serves the financial needs of m...
How the Company Makes Money
Washington Federal primarily makes money through traditional banking spread and fee income. Its largest earnings driver is net interest income: it pays interest (and incurs funding costs) on customer deposits and other borrowings, and earns intere...
Washington Federal Earnings Call Summary
Earnings Call Date:Jul 16, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Oct 15, 2026
Earnings Call Sentiment Positive
The quarter showed clear positives: solid loan origination momentum (notably C&I), improved efficiency, steady margin, stronger EPS (up 2.4% linked and ~15% YoY), healthy capital and liquidity, and a robust pipeline for loans and fees. Credit metrics have deteriorated modestly (criticized loans up, a large C&I account on non-accrual) and deposit competition and outflows are a near-term headwind that could pressure funding costs and margin. Overall, management appears confident in positioning, reserve coverage, and capital flexibility while acknowledging macro and deposit-market challenges.Positive Updates
Earnings and EPS Growth
Net income available to common shareholders was $62.5 million; diluted EPS was $0.84 for the quarter. EPS increased by $0.02 linked quarter (2.4%) and rose ~15% year-over-year versus the prior fiscal-year quarter.
Negative Updates
Deposit Outflows and Competitive Pressure
Total deposits decreased $192 million during the quarter. Time deposits declined $191 million (-2.3%); interest-bearing deposits decreased slightly by $70 million (just under 1%). Management highlighted intense competition for deposits and market trends reducing non-interest-bearing deposit share nationally (from ~30% in 2021 to ~22% today).
Read all updates
Q3-2026 Updates
Positive
Negative
Earnings and EPS Growth
Net income available to common shareholders was $62.5 million; diluted EPS was $0.84 for the quarter. EPS increased by $0.02 linked quarter (2.4%) and rose ~15% year-over-year versus the prior fiscal-year quarter.
Read all positive updates
Company Guidance
Guidance from the call was largely steady and growth‑oriented: management expects active loan portfolio growth of 8%–12% going forward (after linked‑quarter active loan growth of 10% and gross active loans +14% including unfunded), a relatively flat margin next quarter (NIM ~2.81%–2.82%, spot yield on earning assets 5.12%, cost of interest‑bearing liabilities 2.77%; Luther Burbank accretion of $6–7M/quarter on $160M deferred income could be incremental), and an FY‑2026 effective tax rate of about 21.8% (current quarter 21.6%). Capital and liquidity guidance: CET1 ~11.4%, total risk‑based capital ~14.4%, on‑balance‑sheet liquidity $4.8B, loan‑to‑deposit 95.6%, core deposits 80.6% (non‑interest‑bearing 12.6% today, target 20% by 2030), and potential RWA relief of ~12.5% (~$300M) from the proposed Basel III rule. Operational and credit metrics referenced as context for guidance included quarter originations $1.5B (active), loan pipeline $2.9B, efficiency ratio target 50%–55% (Q June 53.7%), allowance coverage 1.08% of gross loans, provision $11M, net charge‑offs $1.6M (≈3 bps annualized), NPAs 0.49%, criticized loans 4.9%, EPS $0.84 (net income $62.5M), and management remains opportunistic but paused buybacks after repurchasing 4.7M shares YTD at $30.99.Washington Federal Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
58
Neutral
Cash Flow
74
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.39B | 1.41B | 1.43B | 1.10B | 733.38M | 652.60M |
| Gross Profit | 761.66M | 717.73M | 704.33M | 701.11M | 658.61M | 565.60M |
| EBITDA | 339.90M | 299.36M | 390.16M | 348.05M | 364.09M | 267.05M |
| Net Income | 256.47M | 226.07M | 200.04M | 257.43M | 236.33M | 183.62M |
Balance Sheet | ||||||
| Total Assets | 27.60B | 26.70B | 28.06B | 22.47B | 20.77B | 19.65B |
| Cash, Cash Equivalents and Short-Term Investments | 676.47M | 3.27B | 4.95B | 2.98B | 2.74B | 4.23B |
| Total Debt | 3.32B | 1.82B | 3.32B | 3.65B | 2.13B | 1.72B |
| Total Liabilities | 24.57B | 23.66B | 25.06B | 20.05B | 18.50B | 17.52B |
| Stockholders Equity | 3.02B | 3.04B | 3.00B | 2.43B | 2.27B | 2.13B |
Cash Flow | ||||||
| Free Cash Flow | 226.97M | 208.25M | 414.55M | 198.89M | 256.68M | 284.98M |
| Operating Cash Flow | 267.51M | 236.95M | 439.23M | 213.96M | 268.46M | 314.45M |
| Investing Cash Flow | -1.00B | -318.41M | 3.29B | -1.38B | -2.49B | -579.75M |
| Financing Cash Flow | 603.25M | -1.64B | -2.33B | 1.46B | 817.86M | 653.12M |
Washington Federal Technical Analysis
Negative
36.22
Price Trends
34.24
Negative
35.38
Negative
33.85
Negative
Market Momentum
-1.36
Negative
26.90
Positive
15.95
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WAFD, the sentiment is Negative. The current price of 36.22 is above the 20-day moving average (MA) of 31.08, above the 50-day MA of 34.24, and above the 200-day MA of 33.85, indicating a bearish trend. The MACD of -1.36 indicates Negative momentum. The RSI at 26.90 is Positive, neither overbought nor oversold. The STOCH value of 15.95 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WAFD.
Washington Federal Risk Analysis
Washington Federal disclosed 2 risk factors in its most recent earnings report. Washington Federal reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Washington Federal Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $2.43B | 10.91 | 10.65% | 3.07% | 2.89% | 15.51% | |
71 Outperform | $4.02B | 10.91 | 10.33% | 3.03% | 4.05% | 38.82% | |
68 Neutral | $1.11B | 12.81 | 7.69% | 3.57% | 17.16% | 47.28% | |
68 Neutral | $3.57B | 11.61 | 8.13% | 2.41% | 27.48% | 31.72% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
66 Neutral | $3.29B | 10.62 | 9.55% | 5.45% | -5.41% | 45.98% | |
65 Neutral | $2.18B | 9.00 | 8.50% | 3.67% | -4.62% | 21.13% |
* Financial Sector Average
WAFD
Washington Federal
29.51
1.44
5.13%
BANR
Banner
66.81
7.07
11.83%
FIBK
First Interstate Bancsystem
34.79
5.16
17.41%
HFWA
Heritage Financial
27.24
5.04
22.69%
RNST
Renasant
39.29
4.75
13.75%
UCB
United Community Banks
33.58
3.04
9.96%
Washington Federal Corporate Events
Business Operations and StrategyExecutive/Board ChangesDelistings and Listing ChangesM&A Transactions
Washington Federal Announces Reverse Merger with EverBank
Positive
Sep 8, 2026
On September 6, 2026, WaFd, Inc. agreed to a $3.9 billion reverse merger with EverBank Financial Corp that will see EverBank merge into WaFd, followed by the combined holding company adopting the EverBank Financial Corp name and trading on Nasdaq ...
Dividends
Washington Federal Board Declares Preferred Stock Dividend
Positive
Aug 11, 2026
On August 11, 2026, WaFd, Inc.’s Board of Directors declared a cash dividend of $12.1875 per share on its 4.875% Fixed Rate Series A Non-Cumulative Perpetual Preferred Stock. The dividend, equal to $0.30468750 per depositary share of the NAS...
Business Operations and StrategyFinancial Disclosures
WaFd Bank Highlights Strong Growth and Credit Performance
Positive
Jul 28, 2026
WaFd, Inc., operating as WaFd Bank, is a Washington state-chartered commercial bank headquartered in Seattle and the second-largest bank based in the Pacific Northwest. The full-service consumer and commercial lender runs 210 branches across nine ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.