Washington Federal (WAFD)
NASDAQ:WAFD
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Washington Federal
(NASDAQ:WAFD)
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Rating:65Neutral
Price Target:
$33.00
▲(0.89% Upside)
Action:ReiteratedDate:03/03/26
Overall score reflects solid underlying financial resilience and cash generation, supported by attractive valuation and dividend yield. These positives are tempered by weakening technical momentum and earnings-call risks tied to credit migration and near-term margin pressure.
Positive Factors
Cash generation / FCF quality
Strong cash conversion (FCF ~91% of net income and healthy TTM operating cash flow) indicates durable internal funding for dividends, buybacks, reserves and loan growth. Consistent cash generation supports capital allocation and cushions earnings volatility over the medium term.
Negative Factors
Asset-quality deterioration
A sharp rise in nonaccruals and higher NPAs signals meaningful credit migration that can persist across reporting periods. Elevated stressed loans force higher provisions, reduce interest income recognition, and can constrain capital deployment and loan origination capacity over the coming quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation / FCF quality
Strong cash conversion (FCF ~91% of net income and healthy TTM operating cash flow) indicates durable internal funding for dividends, buybacks, reserves and loan growth. Consistent cash generation supports capital allocation and cushions earnings volatility over the medium term.
Read all positive factors
Washington Federal (WAFD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.48B
Dividend Yield3.27%
Average Volume (3M)506.91K
Price to Earnings (P/E)9.6
Beta (1Y)0.58
Revenue Growth-1.58%
EPS Growth6.34%
CountryUS
Employees2,018
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)N/A
Shares Outstanding75,863,335
10 Day Avg. Volume540,448
30 Day Avg. Volume506,909
Financial Highlights & Ratios
PEG Ratio1.92
Price to Book (P/B)0.80
Price to Sales (P/S)1.72
P/FCF Ratio11.66
Enterprise Value/Market Cap1.71
Enterprise Value/Revenue3.06
Enterprise Value/Gross Profit5.79
Enterprise Value/Ebitda15.35
Forecast
1Y Price Target
$33.17Price Target Upside1.41% Upside
Rating ConsensusHold
Number of Analyst Covering3
EPS Forecast (FY)3.08
Revenue Forecast (FY)$767.40M
Washington Federal Business Overview & Revenue Model
Company Description
WaFd, Inc. engages in the provision of lending, depository, insurance, and other banking services to consumers. It also offers banking services to mid-sized to large businesses, and owners and developers of commercial real estate. The company was ...
How the Company Makes Money
Washington Federal primarily generates revenue through interest income from loans, which is the largest component of its earnings. The bank issues various types of loans, including residential mortgages, commercial real estate loans, and consumer ...
Washington Federal Earnings Call Summary
Earnings Call Date:Jan 15, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 09, 2026
Earnings Call Sentiment Neutral
The call presented a mix of solid operating and capital results alongside emerging credit and margin headwinds. Positive elements include strong EPS growth (40% YoY), active loan production ($1.1B) and a 28% increase in the lending pipeline, improved deposit composition (core deposits 79.7%) and a tighter efficiency ratio (55.3%). Offsetting these strengths are meaningful increases in nonaccrual loans and NPAs (nonaccruals +49%), higher delinquencies, a modest level of net charge-offs, near-term margin pressure from MBS purchases and nonaccrual reversals, and increased borrowings to fund the investment portfolio. Management emphasized capital adequacy, strategic shift to business banking (Build 2030), and confidence in loan pipeline conversion, but also acknowledged regulatory (CRA) limitations and deposit challenges. Overall, the positives and negatives are balanced — the company is executing strategic initiatives and returning capital while navigating elevated credit migration and margin pressure.Positive Updates
Strong EPS and Net Income Growth
Net income available to common shareholders of $60.5 million, or $0.79 diluted EPS for the quarter (vs $0.54 in Q1 FY2025 and $0.72 in prior quarter) — management cited 40% year-over-year EPS growth and 10% linked-quarter EPS growth.
Negative Updates
Increase in Nonperforming Assets and Nonaccrual Loans
Nonperforming assets rose to $203 million (0.75% of total assets) from $143 million (0.54% prior quarter). Nonaccrual loans increased by $62.7 million (49% since September 30, 2025), pressuring interest income recognition and reported NIM.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong EPS and Net Income Growth
Net income available to common shareholders of $60.5 million, or $0.79 diluted EPS for the quarter (vs $0.54 in Q1 FY2025 and $0.72 in prior quarter) — management cited 40% year-over-year EPS growth and 10% linked-quarter EPS growth.
Read all positive updates
Company Guidance
Management's guidance focused on margin and loan growth: they target lifting net interest margin to ~3.0% within the next two years (current quarter NIM 2.70%, spot margin 2.77%; yield on interest‑earning assets 5.05%, cost of interest‑bearing liabilities 2.76%), while flagging near‑term headwinds from mortgage‑backed security purchases (securities +$728M this quarter, effective yield 4.93%, contributed ~$1.2M this quarter and ~1.03% annualized on balances) and a ~$5M nonaccrual interest reversal. They expect active loan growth of 8–12% over 1–2 years (management noted 6–10% for FY26) with a $3.2B lending pipeline (up $697M, +28% QoQ), plan to increase noninterest‑bearing deposits to 20% of total by 2030 (currently 12.6%; NIB +$125M, +4.9% QoQ; NIB accounts +5,800 or +2.5% YoY), target operating efficiency near the ~55% top end (current 55.3%) and higher return on tangible common equity (10.6% today; ~12.9% at a 3% margin), while maintaining strong liquidity and capital (loan‑to‑deposit 92.7%, core deposits 79.7%) and continuing opportunistic buybacks (≈1.95–2.0M shares repurchased at $29.75; 6.3M shares remaining authorization; stock ~1.1x tangible book).Washington Federal Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
66
Positive
Cash Flow
71
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 | 734.42M | 717.73M | 704.33M | 701.11M | 658.61M | 565.60M |
| EBITDA | 277.06M | 299.36M | 390.16M | 348.05M | 364.09M | 267.05M |
| Net Income | 243.00M | 226.07M | 200.04M | 257.43M | 236.33M | 183.62M |
Balance Sheet | ||||||
| Total Assets | 27.29B | 26.70B | 28.06B | 22.47B | 20.77B | 19.65B |
| Cash, Cash Equivalents and Short-Term Investments | 3.98B | 3.27B | 4.95B | 2.98B | 2.74B | 4.23B |
| Total Debt | 2.49B | 1.82B | 3.32B | 3.65B | 2.13B | 1.72B |
| Total Liabilities | 24.26B | 23.66B | 25.06B | 20.05B | 18.50B | 17.52B |
| Stockholders Equity | 3.03B | 3.04B | 3.00B | 2.43B | 2.27B | 2.13B |
Cash Flow | ||||||
| Free Cash Flow | 215.30M | 208.25M | 414.55M | 198.89M | 256.68M | 284.98M |
| Operating Cash Flow | 248.00M | 236.95M | 439.23M | 213.96M | 268.46M | 314.45M |
| Investing Cash Flow | -315.52M | -318.41M | 3.29B | -1.38B | -2.49B | -579.75M |
| Financing Cash Flow | -705.30M | -1.64B | -2.33B | 1.46B | 817.86M | 653.12M |
Washington Federal Technical Analysis
Positive
32.71
Price Trends
32.00
Positive
32.10
Positive
30.86
Positive
Market Momentum
0.30
Negative
60.13
Neutral
73.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WAFD, the sentiment is Positive. The current price of 32.71 is above the 20-day moving average (MA) of 31.76, above the 50-day MA of 32.00, and above the 200-day MA of 30.86, indicating a bullish trend. The MACD of 0.30 indicates Negative momentum. The RSI at 60.13 is Neutral, neither overbought nor oversold. The STOCH value of 73.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $3.09B | 9.29 | 9.77% | 3.79% | 5.15% | 16.42% | |
76 Outperform | $2.61B | 9.57 | 9.46% | 3.72% | -1.76% | 32.44% | |
72 Outperform | $2.92B | 8.86 | 10.62% | 4.69% | 38.34% | 89.73% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | $2.18B | 10.97 | 10.28% | 2.97% | 6.98% | 15.08% | |
65 Neutral | $2.48B | 9.60 | 8.02% | 3.27% | -1.58% | 6.34% | |
65 Neutral | $2.64B | 10.48 | 10.98% | 2.38% | 17.95% | ― |
* Financial Sector Average
WAFD
Washington Federal
32.71
6.30
23.84%
BANR
Banner
64.07
6.08
10.49%
FFBC
First Financial Bancorp
29.34
7.70
35.58%
FRME
First Merchants
40.86
7.01
20.69%
PFS
Provident Financial Services
22.33
7.72
52.85%
TRMK
Trustmark
44.84
13.27
42.03%
Washington Federal Corporate Events
Business Operations and StrategyExecutive/Board Changes
Washington Federal Adds Erin Hill to Board
Positive
Mar 2, 2026
On February 27, 2026, WaFd, Inc.’s board appointed veteran financial executive Erin Hill to its board of directors, effective March 2, 2026, filling the vacancy left by David K. Grant after his term expired at the 2026 annual meeting. Hill, ...
Business Operations and StrategyFinancial DisclosuresRegulatory Filings and Compliance
Washington Federal Highlights Strategic Shift and Credit Strength
Positive
Feb 23, 2026
On Dec. 31, 2025, WaFd, Inc. furnished an investor slide deck used by executives in meetings with institutional investors and analysts, detailing the bank’s franchise profile, strategy and performance metrics. The materials emphasize WaFd...
Executive/Board ChangesShareholder Meetings
Washington Federal shareholders approve directors and governance measures
Positive
Feb 4, 2026
WaFd, Inc., the parent company of Washington Federal, is a financial institution whose board of directors oversees governance, risk management and key oversight committees such as audit and technology. At its annual meeting of shareholders held on...
Dividends
WaFd Declares Quarterly Dividend on Series A Preferred
Positive
Feb 3, 2026
On February 3, 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, equivalent to $0.30468750 per depositary share, which represents ...
Business Operations and StrategyLegal ProceedingsRegulatory Filings and Compliance
Washington Federal Wins Appeal, CRA Rating Upgraded
Positive
Jan 22, 2026
On January 21, 2026, WaFd Bank reported that it had prevailed in its appeal to the Federal Deposit Insurance Corporation’s Supervision Appeals Review Committee over a previously issued Community Reinvestment Act rating that covered the perio...
Financial Disclosures
WaFd Schedules Fiscal Q1 2026 Earnings Release Call
Neutral
Jan 5, 2026
On January 5, 2026, WaFd Inc. announced it will report financial results for its first quarter of fiscal 2026, covering the period ended December 31, 2025, after the market close on January 15, 2026, and will discuss those results with investors a...
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.