Washington Federal (WAFD) AI Stock Analysis

• Market Cap: $2.00B
• Dividend Yield: 4.29%
• Average Volume (3M): 719.21K
• Price to Earnings (P/E): 11.3
• Beta (1Y): 0.88
• Revenue Growth: 29.57%
• EPS Growth: -36.51%
• Country: US
• Employees: 2,208
• Sector: Financial
• Sector Strength: 86
• Industry: Banks - Regional
• EPS (TTM): 2.16
• Shares Outstanding: 81,551,340
• 10 Day Avg. Volume: 652,121
• 30 Day Avg. Volume: 719,207
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.11
• Price to Cash Flow (P/CF): 11.40
• P/FCF Ratio: 3.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $33.75
• Price Target Upside: 37.53% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

Washington Federal demonstrates a solid financial foundation with effective cash management and a stable balance sheet. The recent corporate events indicate strategic growth but also highlight risks from restructuring and leadership changes. While the technical indicators suggest cautious optimism, the company's attractive valuation provides a buffer against market volatility.

Washington Federal Business Overview & Revenue Model

Company Description

Washington Federal, Inc. (WAFD) is a bank holding company headquartered in Seattle, Washington. It operates as Washington Federal Bank, a federally insured state-chartered bank that provides a wide range of financial services to individual and commercial clients. The bank offers various deposit products, residential real estate loans, commercial real estate loans, construction loans, commercial and industrial loans, and treasury management services across its network of branches located in the western United States.

How the Company Makes Money

Washington Federal makes money primarily through the interest income it earns on loans and investments. The bank generates revenue from the interest charged on residential and commercial real estate loans, construction loans, and commercial and industrial loans. Additionally, WAFD earns income from service charges on deposit accounts, fees for treasury management services, and other financial services. The bank also invests in securities, which provides another source of interest income. Key factors contributing to its earnings include its ability to manage interest rate risk, maintain asset quality, and expand its customer base through strategic branch locations and customer service.

Washington Federal Financial Statement Overview

Summary

Washington Federal shows a robust financial structure with strong gross profits and efficient cash flow management. Despite some volatility in revenue growth and past leverage, the company's current financial position is stable. The balance sheet is strengthened by high equity levels, though past fluctuations in leverage highlight potential risks.

Income Statement

The company exhibits a strong gross profit margin, indicating effective cost management. However, there is volatility in EBIT margins, with a notable negative EBIT in the recent annual report. While revenue growth was positive from 2023 to 2024, the trajectory remains inconsistent, suggesting potential challenges in maintaining steady growth.

Balance Sheet

The company maintains a solid equity position with no debt in the latest TTM period, enhancing financial stability. However, the debt-to-equity ratio was significant in the annual report, implying past leverage. A high equity ratio further supports balance sheet strength, though the fluctuations in equity and liabilities over the years suggest potential risks.

Cash Flow

Strong operating and free cash flow growth is evident, demonstrating efficient cash management. The company's capacity to convert net income into cash flow is robust, indicating healthy cash flow operations. However, the negative financing cash flow in recent periods suggests a focus on debt repayment or reduced external financing.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
1.15B	60.69M	742.61M	661.61M	566.10M	556.49M
	Gross Profit
967.90M	1.43B	742.61M	661.61M	566.10M	556.49M
	EBIT
286.84M	-1.10B	325.08M	285.41M	233.14M	219.19M
	EBITDA
269.40M	0.00	348.05M	364.09M	267.05M	259.10M
	Net Income Common Stockholders
188.85M	200.04M	257.43M	236.33M	183.62M	173.44M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.16B	25.97M	2.98B	950.00	4.23B	3.95B
	Total Assets
22.64B	28.06B	22.47B	20.77B	19.65B	18.79B
	Total Debt
3.88B	3.32B	3.65B	2.13B	1.72B	2.70B
	Net Debt
2.73B	937.21M	2.67B	1.44B	-370.81M	997.02M
	Total Liabilities
20.19B	25.06B	3.65B	300.04M	1.72B	2.70B
	Stockholders Equity
2.45B	3.00B	2.43B	2.27B	2.13B	2.01B
Cash Flow		Free Cash Flow
361.92M	439.23M	198.89M	256.68M	284.98M	134.66M
	Operating Cash Flow
378.40M	439.23M	213.96M	268.46M	314.45M	166.60M
	Investing Cash Flow
2.84B	3.29B	-1.38B	-2.49B	-579.75M	-920.98M
	Financing Cash Flow
-2.86B	-2.33B	1.46B	817.86M	653.12M	2.04B

Washington Federal Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 24.54
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 24.54 is below the 20-day moving average (MA) of 27.56, below the 50-day MA of 28.61, and below the 200-day MA of 32.20, indicating a bearish trend. The MACD of -0.23 indicates Negative momentum. The RSI at 44.37 is Neutral, neither overbought nor oversold. The STOCH value of 50.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WAFD.

Washington Federal Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FRME	76 Outperform	$2.03B	10.16	8.85%	4.04%	5.54%	-8.57%
TBBK	75 Outperform	$2.26B	10.00	27.24%	―	11.72%	23.37%
PFS	72 Outperform	$2.07B	15.10	5.38%	6.47%	63.85%	-39.11%
FFBC	71 Outperform	$2.23B	9.73	9.72%	4.29%	9.95%	-11.02%
WAFD	68 Neutral	$2.00B	11.31	6.90%	4.29%	29.57%	-36.51%
Sector *	64 Neutral	$13.21B	9.26	9.39%	4.87%	16.14%	-8.87%
BANC	60 Neutral	$2.05B	23.42	3.68%	3.31%	345.02%	―

Washington Federal Corporate Events

Washington Federal Approves 2025 Stock Incentive Plan

On February 11, 2025, WaFd, Inc. held its Annual Meeting of Shareholders where the stockholders approved the 2025 Stock Incentive Plan, which replaces the expired 2020 plan. This new plan aims to advance the company’s interests by attracting and retaining qualified personnel and aligning their incentives with shareholder value through various stock-based awards. It reserves 3,250,000 shares of common stock for issuance and will be administered by the Board’s Compensation Committee. Additionally, the meeting saw the election of directors and approval of executive compensation and Deloitte & Touche, LLP’s appointment as independent auditors for fiscal 2025.

Washington Federal Highlights Growth in Investor Presentation

WaFd, Inc. presented a slide presentation for institutional investors and industry analysts as of December 31, 2024, highlighting its strong performance, strategic growth, and commitment to customer satisfaction. The presentation illustrated WaFd’s evolution into a commercial bank with a digital focus, emphasizing its solid asset quality and growth in commercial loans despite fluctuating interest rates. WaFd’s investments in ESG initiatives and technology have resulted in increased web traffic and high customer satisfaction scores, underscoring its steadfast dedication to community development and stakeholder value.

Washington Federal Shifts Strategy Amid Leadership Changes

On January 16, 2025, WaFd announced significant changes including leadership transitions, a strategic shift away from originating single-family mortgages and home equity lines, and a restructuring charge of $5.4 million. The company plans to focus its efforts on business banking, commercial real estate lending, and small business advisory services, aiming to save approximately $17 million in expenses annually and reduce its workforce by 8% by June 2025. The decision is partly due to decreased profitability and increased risk in the mortgage sector, as well as regulatory challenges. WaFd Bank received a ‘Needs to Improve’ CRA compliance rating, which they plan to appeal, while maintaining strong credit quality and a robust capital position. The company reported a 23% decrease in net income for the quarter ended December 31, 2024, with earnings per share impacted by margin compression and restructuring costs.