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Washington Federal
(NASDAQ:WAFD)
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Rating:69Neutral
Price Target:
$41.00
â–²(11.63% Upside)
Action:Reiterated
Date:08/05/26
Overall score reflects improving fundamentals and cash-flow support alongside solid profitability, balanced by higher leverage versus the prior year and only mid-range returns. Valuation is favorable (P/E ~11.2 with ~2.9% yield), while technicals show an uptrend but limited momentum, and the earnings call was constructive with manageable but notable funding and credit watch items.
Positive Factors
Strong free cash flow
Consistent free cash flow (~$256M, ~0.96x conversion) supports durable priorities: reinvestment in lending, reserve building, dividends or selective buybacks. High cash conversion improves weathering of stress periods and funds organic growth without heavy reliance on external capital.
Negative Factors
Rising leverage
Leverage has increased materially (debt-to-equity ~1.10 versus ~0.60 prior year), elevating balance-sheet risk. Higher leverage reduces flexibility for additional lending or capital returns, amplifies sensitivity to funding-cost shocks and could constrain strategic options if earnings soften.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow
Consistent free cash flow (~$256M, ~0.96x conversion) supports durable priorities: reinvestment in lending, reserve building, dividends or selective buybacks. High cash conversion improves weathering of stress periods and funds organic growth without heavy reliance on external capital.
Read all positive factors
Washington Federal (WAFD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.76B
Dividend Yield2.84%
Average Volume (3M)506.91K
Price to Earnings (P/E)11.6
Beta (1Y)0.69
Revenue Growth-4.62%
EPS Growth21.13%
CountryUS
Employees2,055
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)3.28
Shares Outstanding73,995,240
10 Day Avg. Volume540,448
30 Day Avg. Volume506,909
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$38.67Price Target Upside5.27% Upside
Rating ConsensusHold
Number of Analyst Covering3
EPS Forecast (FY)3.27
Revenue Forecast (FY)$788.41M
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 net interest income and noninterest income generated by its banking operations.
1) Net interest income (core earnings): The bank takes in funds largely through customer deposits (e.g., checking, sa...
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 | 333.86M | 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
Positive
36.73
Price Trends
37.13
Positive
35.42
Positive
33.41
Positive
Market Momentum
0.09
Negative
58.38
Neutral
68.86
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 36.73 is below the 20-day moving average (MA) of 37.28, below the 50-day MA of 37.13, and above the 200-day MA of 33.41, indicating a bullish trend. The MACD of 0.09 indicates Negative momentum. The RSI at 58.38 is Neutral, neither overbought nor oversold. The STOCH value of 68.86 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 |
|---|---|---|---|---|---|---|---|
75 Outperform | $3.53B | 11.85 | 10.07% | 2.96% | 11.65% | 13.28% | |
74 Outperform | $3.17B | 10.31 | 11.00% | 4.02% | 3.72% | 35.18% | |
73 Outperform | $2.75B | 12.11 | 11.01% | 2.12% | 1.59% | 10.81% | |
72 Outperform | $2.43B | 11.95 | 10.65% | 2.85% | 2.89% | 15.51% | |
71 Outperform | $2.66B | 13.66 | 7.26% | 3.36% | 5.05% | -19.06% | |
69 Neutral | $2.76B | 11.60 | 8.50% | 2.96% | -4.62% | 21.13% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
WAFD
Washington Federal
37.76
7.72
25.71%
BANR
Banner
73.42
9.37
14.63%
FFBC
First Financial Bancorp
34.08
9.80
40.35%
FRME
First Merchants
43.24
5.19
13.64%
PFS
Provident Financial Services
24.88
6.45
35.03%
TRMK
Trustmark
48.12
9.74
25.38%
Washington Federal Corporate Events
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 ...
Dividends
WaFd Declares Quarterly Cash Dividend on Series A Preferred
Positive
May 12, 2026
On May 12, 2026, the Board of Directors of WaFd, Inc. declared a cash dividend of $12.1875 per share on its 4.875% Fixed Rate Series A Non-Cumulative Perpetual Preferred Stock. This dividend, equal to $0.30468750 per WAFDP depositary share represe...
Regulatory Filings and Compliance
WaFd Provides Investor Presentation Under Regulation FD Disclosure
Neutral
May 5, 2026
WaFd, Inc. has furnished a slide presentation that its executive management plans to use in meetings with institutional investors and industry analysts, making the materials available through the bank’s investor relations website. The compan...
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.