Western Alliance (WAL) AI Stock Analysis

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Western Alliance

(NYSE:WAL)

59Neutral

Western Alliance's stock score reflects a mix of strengths and challenges. The strong balance sheet and attractive valuation are key positives. However, technical weaknesses, missing revenue data, and operational challenges weigh on the score. Investors should watch for improvements in revenue clarity and technical trends.

Positive Factors

Capital Position

Management maintains a strong capital position, allowing flexibility for loan growth, acquisitions, or share buybacks.

Earnings

Western Alliance shares reacted negatively to better-than-expected results, which implies potential for the bank to earn a higher EPS than previously forecasted.

Valuation

Despite superior growth prospects, the stock trades at a meaningful discount to peers, indicating potential undervaluation.

Negative Factors

Deposit Growth

$2 billion in expected deposit outflows in the fourth quarter are likely to keep shares range-bound in the near term.

Guidance

Western Alliance reported a mixed quarter and provided a weaker than expected 2024 guidance update.

Interest Rates

Elevated interest rates are likely to remain a concern for stock valuation due to impacts on funding costs and perceived credit risk.

Western Alliance (WAL) vs. S&P 500 (SPY)

Market Cap

$6.98B

Dividend Yield2.26%

Average Volume (3M)1.44M

Price to Earnings (P/E)8.9

Beta (1Y)1.78

Revenue Growth13.60%

EPS Growth8.85%

CountryUS

Employees3,524

SectorFinancial

Sector Strength77

IndustryBanks - Regional

Share Statistics

EPS (TTM)1.95

Shares Outstanding110,454,290

10 Day Avg. Volume2,074,716

30 Day Avg. Volume1,441,128

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)2.84

Price to Cash Flow (P/CF)-3.40

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$102.89

Price Target Upside58.59% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering10

Western Alliance Business Overview & Revenue Model

Company DescriptionWestern Alliance Bancorporation (WAL) is a regional bank holding company headquartered in Phoenix, Arizona. The company operates through its primary subsidiary, Western Alliance Bank, providing a wide range of banking and financial services. It serves diverse sectors including commercial real estate, mortgage banking, and small and medium-sized businesses, with a strong focus on personalized service and tailored solutions. The bank offers products such as commercial and industrial loans, real estate loans, and treasury management services, catering to a broad clientele across the United States.

How the Company Makes MoneyWestern Alliance makes money primarily through interest income from its lending activities, which include commercial loans, real estate loans, and consumer loans. The company earns revenue from the interest rate spread between the interest it pays on deposits and the interest it earns on loans. In addition to interest income, Western Alliance generates revenue from non-interest income sources such as fees for treasury management services, deposit account services, and other banking services. The bank also benefits from strategic partnerships and a network of branches that enhance its outreach and customer service capabilities, contributing to its overall revenue growth.

Western Alliance Financial Statement Overview

Summary

Western Alliance shows financial resilience with a strong balance sheet and improving cash flows. The balance sheet is robust with zero debt, enhancing stability. However, the income statement is concerning due to missing revenue data for 2024, raising questions about revenue reliability. Cash flow improvements are noted, but operational volatility persists.

Income Statement

Neutral

The income statement shows volatility in revenue and profit margins. The company experienced a drop in total revenue in the latest year, with total revenue at zero for 2024, which is unusual and suggests data inconsistency or reporting issues. The net income for 2024 is higher than in previous years, indicating some level of profitability. However, the absence of revenue figures raises concerns about sustainability.

Balance Sheet

Positive

The balance sheet displays a solid equity base with stockholders' equity rising to $6.7 billion in 2024 from $6.1 billion in 2023. The debt-to-equity ratio improved significantly, with total debt dropping to zero, indicating strong balance sheet management. The equity ratio increased, reflecting a stable capital structure. Overall, the balance sheet indicates financial stability with reduced leverage.

Cash Flow

Neutral

Cash flow analysis reveals improvements but also inconsistencies. The operating cash flow turned positive in 2024 after a negative outflow in 2023, showing better cash generation. Free cash flow also improved significantly, swinging from negative to positive. However, the volatility in cash flows over recent years suggests some operational challenges.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
3.16B	2.13B	2.30B	1.84B	1.20B
	Gross Profit
3.16B	2.56B	2.30B	1.84B	1.20B
	EBIT
-3.03B	865.20M	1.81B	1.12B	622.50M
	EBITDA
0.00	1.02B	1.39B	1.17B	657.10M
	Net Income Common Stockholders
787.70M	722.40M	1.06B	899.20M	506.60M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
13.79B	1.58B	8.13B	6.71B	7.38B
	Total Assets
80.93B	70.86B	67.73B	55.98B	36.46B
	Total Debt
6.62B	8.12B	7.38B	2.52B	633.60M
	Net Debt
2.52B	6.55B	6.33B	2.01B	-2.04B
	Total Liabilities
74.23B	64.78B	62.38B	51.02B	33.05B
	Stockholders Equity
6.71B	6.08B	5.36B	4.96B	3.41B
Cash Flow		Free Cash Flow
235.90M	-442.90M	2.10B	-2.72B	643.40M
	Operating Cash Flow
235.90M	-328.60M	2.25B	-2.65B	670.20M
	Investing Cash Flow
-19.00M	-2.16B	-13.13B	-14.71B	-7.54B
	Financing Cash Flow
-176.70M	3.02B	11.41B	15.21B	9.10B

Western Alliance Technical Analysis

Technical Analysis Sentiment

Negative

Last Price64.88

Price Trends

50DMA

77.52

Negative

100DMA

82.67

Negative

200DMA

81.47

Negative

Market Momentum

MACD

-3.85

Negative

RSI

39.60

Neutral

STOCH

67.82

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WAL, the sentiment is Negative. The current price of 64.88 is below the 20-day moving average (MA) of 69.86, below the 50-day MA of 77.52, and below the 200-day MA of 81.47, indicating a bearish trend. The MACD of -3.85 indicates Negative momentum. The RSI at 39.60 is Neutral, neither overbought nor oversold. The STOCH value of 67.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WAL.

Western Alliance Risk Analysis

Western Alliance disclosed 41 risk factors in its most recent earnings report. Western Alliance 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

Western Alliance Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WBS	76 Outperform	$7.74B	10.33	8.54%	3.54%	5.86%	-10.72%
CFR	73 Outperform	$7.11B	12.48	15.13%	3.38%	7.81%	-2.49%
WTFC	71 Outperform	$6.79B	9.84	11.84%	1.80%	11.51%	7.73%
PNFP	71 Outperform	$6.97B	15.10	7.77%	0.95%	8.09%	-11.31%
CMA	64 Neutral	$6.95B	10.57	10.72%	5.36%	-6.54%	-21.90%
Sector *	62 Neutral	$11.85B	9.13	8.11%	79.54%	12.80%	-5.24%
WAL	59 Neutral	$6.98B	8.92	12.32%	2.26%	13.60%	8.85%

* Financial Sector Average

Performance Comparison

WAL

Western Alliance

64.88

7.32

12.72%

CMA

Comerica

50.60

0.59

1.18%

CFR

Cullen/Frost Bankers

110.65

0.87

0.79%

PNFP

Pinnacle Financial Partners

93.68

13.01

16.13%

WBS

Webster Financial

44.54

-1.17

-2.56%

WTFC

Wintrust Financial

101.43

3.75

3.84%

Western Alliance Earnings Call Summary

Earnings Call Date: Apr 21, 2025 | % Change Since: 0.00% | Next Earnings Date: Jul 17, 2025

Earnings Call Sentiment Positive

Western Alliance demonstrated strong earnings performance and deposit growth, with significant improvements in asset quality and efficiency targets. However, challenges such as a decline in net interest income and increased criticized assets were noted. Overall, the highlights indicate a positive outlook despite some financial and operational challenges.

Highlights

Strong Earnings Performance

Western Alliance generated $1.95 per share for the fourth quarter and $7.09 for 2024. Pre-provision net revenue growth was 12% linked-quarter unannualized.

Robust Deposit Growth

Deposits grew $11 billion in 2024, with a 20% year-over-year increase, demonstrating strong franchise strength.

Improved Asset Quality

A material decline in special mention loans was noted, with net charge-offs expected to remain stable in 2025 compared to 2024.

Efficiency and Profitability Goals

Western Alliance aims to lower its efficiency ratio to 50% and achieve a higher teens return on tangible common equity by year-end 2025.

Lowlights

Net Interest Income Decline

Net interest income decreased $30 million during the fourth quarter due to lower yields on interest-earning assets.

Criticized Assets Increase

Criticized assets rose $61 million in the fourth quarter, although the overall percentage of criticized assets declined year-over-year.

Higher Deposit Insurance Costs

Deposit insurance expenses increased due to higher insured balances, impacting overall expense management.

Company Guidance

During Western Alliance Bancorporation's fourth quarter 2024 earnings call, guidance for 2025 was provided, highlighting a focus on maintaining a strong liquidity position and optimizing asset mix. The company aims for loan growth of approximately $5 billion and deposit growth of $8 billion, targeting a loan-to-deposit ratio around 80%. Net interest income is projected to increase by 6-8%, with non-interest income also expected to rise by the same percentage, driven by diversified revenue streams. The efficiency ratio is anticipated to improve to below 50% by year-end, alongside a return on tangible common equity moving toward the upper teens. Additionally, credit quality remains stable, with net charge-offs expected to remain consistent with 2024 levels.

Western Alliance Corporate Events

Executive/Board ChangesFinancial Disclosures

Western Alliance Reappoints Kenneth Vecchione as CEO

Positive

Apr 21, 2025

Western Alliance Bancorporation announced the reappointment of Kenneth A. Vecchione as President and CEO, effective April 15, 2025, following his temporary medical leave. Dale Gibbons, who served as interim CEO, will continue as Vice Chair and CFO. The company reported solid financial results for the first quarter of 2025, with net income of $199.1 million and earnings per share of $1.79. Despite a decrease in net revenue compared to the previous quarter, the company saw growth in loans and deposits, and maintained strong asset quality and capital levels, positioning it well for future business momentum.

Spark’s Take on WAL Stock

According to Spark, TipRanks’ AI Analyst, WAL is a Neutral.

Western Alliance’s solid balance sheet and attractive valuation contribute positively to its overall stock score. Despite strong earnings guidance and deposit growth, concerns about missing revenue data and technical weaknesses weigh on the score. Investors should monitor financial reporting clarity and technical trends as key factors in future stock performance.

To see Spark’s full report on WAL stock, click here.

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.