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Walker & Dunlop (WD)
:WD
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Walker & Dunlop
(NYSE:WD)
67Neutral
Positive Factors
Debt Financing Growth
Debt financing volumes increased 33% year-over-year, surpassing estimates.
Diverse Revenue Streams
WD's diverse business operations, including debt brokerage, investment sales, and asset management, contribute to over 70% of its cash flow from servicing and associated fees.
Market Position
WD has a strong market position with an 8% market share of multifamily debt originations, ranking #1 with Fannie Mae and #4 with Freddie Mac.
Negative Factors
Earnings Performance
The company reported GAAP EPS of $0.85, which was below both consensus and analysts' estimates.
Valuation Concerns
WD's valuation is considered attractive at 13.3-15.5x 2025-2026E cash earnings, with potential for further improvement if GSE volumes exceed estimates.
Walker & Dunlop (WD) vs. S&P 500 (SPY)
Market Cap
$2.52B
Dividend Yield3.53%
Average Volume (3M)232.41K
Price to Earnings (P/E)25.4
Beta (1Y)1.11
Revenue Growth7.09%
EPS Growth6.18%
CountryUS
Employees1,394
SectorFinancial
Sector Strength85
IndustryFinancial - Mortgages
Share Statistics
EPS (TTM)0.08
Shares Outstanding33,968,160
10 Day Avg. Volume214,267
30 Day Avg. Volume232,412
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.66
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit8.31
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$100.00Price Target Upside37.80% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Walker & Dunlop Business Overview & Revenue Model
Company DescriptionWalker & Dunlop, Inc., through its subsidiaries, originates, sells, and services a range of multifamily and other commercial real estate financing products and services for owners and developers of real estate in the United States. The company offers first mortgage, second trust, supplemental, construction, mezzanine, preferred equity, small-balance, and bridge/interim loans. It also provides multifamily finance for manufactured housing communities, student housing, affordable housing, and senior housing properties under the Fannie Mae's DUS program; and construction and permanent loans to developers and owners of multifamily housing, affordable housing, senior housing, and healthcare facilities. In addition, the company acts as an intermediary in the placement of commercial real estate debt between institutional sources of capital, including life insurance companies, investment banks, commercial banks, pension funds, CMBS conduits, and other institutional investors, as well as owners of various types of commercial real estate. Further, it advises on capital structure; develops the financing package; facilitates negotiations between its client and institutional sources of capital; coordinates due diligence; and assists in closing the transaction. Additionally, the company offers property sales brokerage, underwriting and risk management, and servicing and asset management services. Walker & Dunlop, Inc. was founded in 1937 and is headquartered in Bethesda, Maryland.
How the Company Makes MoneyWalker & Dunlop generates revenue through multiple streams, primarily from its mortgage banking activities, which involve the origination and sale of commercial real estate loans to government-sponsored enterprises like Fannie Mae and Freddie Mac, as well as other institutional investors. The company earns fees from originating and servicing these loans, with servicing fees providing a steady, recurring income stream. Additionally, Walker & Dunlop generates income from its investment sales platform, where it facilitates the sale of commercial properties, earning commissions and advisory fees. The company also benefits from its strategic partnerships and alliances, which enhance its ability to provide a broad array of financing solutions to its clients. Key factors contributing to its earnings include interest rate environments, real estate market trends, and regulatory developments affecting commercial real estate finance.
Walker & Dunlop Financial Statement Overview
Summary
Walker & Dunlop exhibits stable financial performance with positive revenue growth and cash flow improvements. Despite strong profitability metrics and cash management, challenges exist in maintaining operational efficiency and managing leverage. Continued focus on strengthening margins and reducing debt levels would enhance its financial standing.Income Statement
Walker & Dunlop demonstrated a moderate revenue growth of 7.4% from 2023 to 2024, accompanied by stable profitability metrics. The gross profit margin remains strong at 100% due to the nature of the business. Net profit margin also showed resilience, slightly improving to 9.55% in 2024 from 10.18% in 2023. However, EBIT and EBITDA margins have slightly declined over the years, indicating potential operational efficiency challenges.72
Positive
Balance Sheet
The company has a relatively high debt-to-equity ratio of 0.89, reflecting significant leverage which could pose financial risks if not managed carefully. The equity ratio of 39.88% indicates a reasonable reliance on equity financing. ROE decreased slightly to 6.19% in 2024, highlighting modest returns on shareholder equity. Overall, the balance sheet shows a stable but leveraged financial position.65
Positive
Cash Flow
Walker & Dunlop's cash flow performance improved significantly in 2024 with a positive free cash flow of $116.4 million compared to a negative figure in 2023. The free cash flow growth rate is notably strong, reflecting improved cash management. The operating cash flow to net income ratio is 1.20, showing healthy cash conversion from earnings.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.13B | 1.05B | 1.26B | 1.26B | 1.08B | Gross Profit |
| 503.56M | 471.67M | 617.15M | 647.71M | 606.34M | EBIT |
| 131.50M | 138.20M | 264.96M | 352.06M | 330.27M | EBITDA |
| 369.23M | 363.50M | 500.00M | 562.34M | 499.28M | Net Income Common Stockholders |
| 108.17M | 107.36M | 213.82M | 265.76M | 246.18M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 279.27M | 328.70M | 225.95M | 305.63M | 321.10M | Total Assets |
| 4.38B | 4.05B | 4.05B | 5.05B | 4.65B | Total Debt |
| 1.66B | 1.47B | 1.25B | 2.68B | 2.81B | Net Debt |
| 1.38B | 1.14B | 1.02B | 2.38B | 2.49B | Total Liabilities |
| 2.62B | 2.31B | 2.33B | 3.47B | 3.45B | Stockholders Equity |
| 1.75B | 1.72B | 1.69B | 1.55B | 1.20B |
| Cash Flow | Free Cash Flow | |||
| 116.40M | -16.72M | 1.56B | 861.25M | -1.41B | Operating Cash Flow |
| 129.36M | -518.00K | 1.58B | 870.46M | -1.41B | Investing Cash Flow |
| -38.13M | 126.87M | -133.78M | -377.55M | 115.18M | Financing Cash Flow |
| -154.73M | 6.77M | -1.58B | -457.73M | 1.52B |
Walker & Dunlop Technical Analysis
Negative
72.57
Price Trends
80.92
Negative
87.78
Negative
97.19
Negative
Market Momentum
-1.94
Negative
37.71
Neutral
23.13
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WD, the sentiment is Negative. The current price of 72.57 is below the 20-day moving average (MA) of 74.82, below the 50-day MA of 80.92, and below the 200-day MA of 97.19, indicating a bearish trend. The MACD of -1.94 indicates Negative momentum. The RSI at 37.71 is Neutral, neither overbought nor oversold. The STOCH value of 23.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WD.
Walker & Dunlop Risk Analysis
Walker & Dunlop disclosed 29 risk factors in its most recent earnings report. Walker & Dunlop reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Walker & Dunlop Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $7.72B | 13.35 | 12.39% | ― | 6.44% | -7.86% | |
67 Neutral | $2.52B | 25.44 | 5.62% | 3.53% | 7.09% | 6.18% | |
64 Neutral | $12.61B | 9.79 | 7.95% | 16985.69% | 12.77% | -3.98% | |
61 Neutral | $5.07B | 15.06 | 9.32% | 1.12% | 23.79% | 121.61% | |
61 Neutral | $781.68M | 8.08 | 7.97% | 3.96% | 40.27% | ― | |
56 Neutral | $25.23B | 70.83 | 4.43% | ― | 30.23% | ― | |
48 Neutral | $377.52M | ― | -31.41% | ― | 3.76% | 16.19% |
* Financial Sector Average
Performance Comparison
WD
Walker & Dunlop
72.57
-22.42
-23.60%
PFSI
PennyMac Financial
97.63
5.78
6.29%
COOP
Mr Cooper Group
117.54
36.29
44.66%
LDI
loanDepot
1.08
-1.23
-53.25%
RKT
Rocket Companies
11.92
-1.15
-8.80%
GHLD
Guild Holdings
12.87
0.32
2.55%
Walker & Dunlop Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: -5.19%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a balanced outlook with positive momentum in transaction volume, especially in the multifamily sector, and strategic expansions and hiring. However, financial challenges such as a decline in GAAP EPS, loan loss reserves, and debt brokerage volume were noted. The overall sentiment is balanced with optimism for the future.Q1-2025 Updates
Positive Updates
Solid Q1 Transaction Volume
Walker & Dunlop delivered a healthy Q1 total transaction volume of $7 billion, up 10% from last year, which drove total revenue growth of 4%.
Strong Multifamily Sector Performance
88% of Q1 volume was in multifamily assets, with Fannie Mae originations up 67% from last year, and investment sales volume up 58%.
Strategic Expansion and Hiring
The company added a senior banker to the New York Capital Markets team, entered the hospitality investment sales space, opened a new office in London, and hired a banker to lead growth in the data center space.
Strong Capital Markets Segment Growth
Total revenues for the Capital Markets segment grew 25% to $103 million, with Zelman growing its revenues by 129% due to closing several investment banking transactions.
Positive Sentiment in Q2 Pipeline
The company has already closed 60% of Q1 transaction activity in the first month of Q2, with a promising market outlook for the second quarter and beyond.
Negative Updates
Decline in GAAP EPS
GAAP EPS was only $0.08, down significantly due to personnel costs, fees associated with the debt offering, and additions to the loan loss reserve.
Loan Loss Reserves Increase
Recognized a provision for loan losses of $4 million this quarter compared to $500,000 a year ago, primarily related to a single loan.
Debt Brokerage Volume Decline
Debt brokerage team had a slow Q1 with $2.6 billion of volume compared to $3.3 billion in Q1 of 2024, primarily due to a timing issue.
Non-Cash MSR and Core Earnings Decline
Adjusted EBITDA declined to $65 million and adjusted core earnings per share declined to $0.85.
Company Guidance
During the Q1 2025 earnings call, Walker & Dunlop provided guidance indicating a continuation of strong performance, particularly in the multifamily sector, which accounted for 88% of its $7 billion total transaction volume, a 10% increase from the previous year. Revenue grew by 4%, driven by significant increases in Fannie Mae originations, up 67%, and investment sales, up 58%. Despite seeing a decline in GAAP EPS to $0.08 and adjusted EBITDA to $65 million due to personnel costs and debt refinancing fees, the company remains optimistic about 2025, aiming for $200 million in transaction volume per banker and broker, and plans to raise $600 million in tax credit syndications. Walker & Dunlop expects to benefit from a strategic entry point in the North American commercial real estate market, with nearly $200 billion of equity dry powder ready to invest, particularly as multifamily demand is projected to grow while construction starts decline, potentially leading to an undersupplied market by 2026.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.