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Western Alliance Bancorporation (WAL)
:WAL
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Western Alliance (WAL) AI Stock Analysis

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WAL

Western Alliance

(NYSE:WAL)

Rating:72Outperform
Price Target:
$89.00
â–²(6.96%Upside)
Western Alliance's stock is supported by strong financial performance and solid valuation metrics. The earnings call provided a positive outlook with robust loan and deposit growth. However, challenges in cash flow management and increased expenses are areas of concern. Technical indicators suggest a neutral market sentiment.
Positive Factors
Earnings
NII results came in ahead of estimates and guidance has been revised higher.
Risk/Reward
The stock is viewed as offering a compelling risk/reward profile, with expected superior EPS growth and profitability compared to peers.
Valuation
The discount valuation looks particularly attractive given the forecast which implies ~18% average annual EPS growth for 2025 and 2026, or nearly twice peer average.
Negative Factors
Credit Reserves
Persistent concerns tied to credit reserves, potential headwinds to management’s loan/deposit growth target, and fading hopes for a mortgage rebound could continue to weigh on investor sentiment.
Expense Guidance
Higher expense guidance has been issued, which offsets some of the positive impact of NII results.
Loan and Deposit Growth
Loan and deposit growth were slower than expected, missing the estimates.

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

Western Alliance Business Overview & Revenue Model

Company DescriptionWestern Alliance Bancorporation (WAL) is a leading financial services company headquartered in Phoenix, Arizona. It operates as the bank holding company for Western Alliance Bank, offering a wide range of banking and financial solutions. The company primarily serves commercial clients, providing services such as commercial and industrial loans, real estate loans, and deposit products. Western Alliance is recognized for its robust regional banking network, catering to businesses and individual clients across several states in the U.S., with a focus on growth-oriented companies across diverse industries.
How the Company Makes MoneyWestern Alliance Bancorporation generates revenue through various financial services and products. The primary source of income is interest income from loans and leases, including commercial and industrial loans, commercial real estate loans, and consumer loans. The company also earns non-interest income through service fees, which include deposit account fees, treasury management services, and card-related fees. Additionally, Western Alliance benefits from strategic partnerships and investments in sectors that complement its core banking operations, enhancing its ability to generate diverse revenue streams. The company's earnings are further supported by a strong focus on managing interest rate spreads and maintaining asset quality.

Western Alliance Earnings Call Summary

Earnings Call Date:Jul 17, 2025
(Q2-2025)
|
% Change Since: -1.65%|
Next Earnings Date:Oct 16, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, including significant loan and deposit growth, improved margins, and enhanced profitability metrics. However, challenges remain with higher noninterest expenses, increased other real estate owned, and provision expenses. Overall, the sentiment is cautiously optimistic with a focus on maintaining growth momentum while managing risks.
Q2-2025 Updates
Positive Updates
Strong Loan and Deposit Growth
Western Alliance achieved over $1 billion of sequential loan growth for the second consecutive quarter, funded by nearly $2 billion of quarterly deposit growth.
Improved Net Interest Margin
Net interest margin increased by 6 basis points sequentially, rebounding above 3.5% due to robust asset growth and CD repricing.
Enhanced Profitability Metrics
Return on average tangible common equity reached 14.9%, and return on average assets rose to 1.1%, both notably higher from Q1.
Notable Increase in Noninterest Income
Noninterest income grew 16.4% quarter-over-quarter to $148 million, driven by a 25% increase in mortgage loan production volume.
Asset Quality Improvement
Criticized loans declined by $118 million from Q1, and other real estate owned increased by $167 million, with potential for value creation.
Negative Updates
Increase in Other Real Estate Owned
Other real estate owned increased by $167 million as the bank repossessed office properties to accelerate credit resolution, reflecting ongoing challenges in the office real estate sector.
Higher Noninterest Expense
Noninterest expense rose by $14 million from the prior quarter to $515 million, driven by increased deposit costs.
Provision Expense Increase
Provision expense rose to $40 million due to organic loan growth and replenishment of approximately $30 million of net charge-offs.
Challenges with Mortgage Warehouse Deposits
Mortgage warehouse deposits contributed to increased noninterest expense, with plans to manage these costs moving forward.
Company Guidance
In the second quarter of 2025, Western Alliance Bancorporation reported robust financial performance, with several key metrics showing improvement. The company delivered sequential loan growth exceeding $1 billion for the second straight quarter, funded by nearly $2 billion in quarterly deposit growth. The net interest margin increased by 6 basis points sequentially, rebounding to over 3.5%, aided by robust average earning asset growth and favorable CD repricing. Asset quality remained stable, with criticized loans declining by $118 million from the previous quarter. The company also took possession of office properties worth $167 million, aiming to accelerate credit resolution and capitalize on improving leasing trends. Return on average tangible common equity reached 14.9%, and return on average assets was 1.1%, both higher than the previous quarter. Western Alliance maintained its loan and deposit growth outlook of $5 billion and $8 billion, respectively, for the year, while revising its net interest income growth forecast to 8-10% due to anticipated rate cuts later in the year.

Western Alliance Financial Statement Overview

Summary
Western Alliance demonstrates growth in revenue and profitability metrics, but faces challenges with cash flow management and higher leverage. While profitability remains a strong suit, the company should address its cash flow issues and leverage to ensure long-term stability.
Income Statement
75
Positive
Western Alliance shows a steady increase in total revenue and gross profit over the years. The gross profit margin is consistently strong, and the EBIT and EBITDA margins indicate solid operational efficiency. However, a declining net profit margin suggests rising costs or other financial pressures.
Balance Sheet
68
Positive
The debt-to-equity ratio is relatively high, indicating a higher reliance on debt financing, which poses leverage risk. However, the return on equity is robust, demonstrating effective utilization of shareholders' capital. The equity ratio is stable, suggesting a balanced asset structure.
Cash Flow
60
Neutral
The company faces challenges with negative free cash flow and operating cash flow, signaling potential liquidity issues. Despite this, the free cash flow to net income ratio reflects some resilience in cash management amidst fluctuating cash flows.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue5.08B4.32B3.02B2.06B1.33B
Gross Profit3.02B2.56B2.47B1.97B1.12B
EBITDA1.11B1.02B1.39B1.17B657.10M
Net Income787.70M722.40M1.06B899.20M506.60M
Balance Sheet
Total Assets80.93B70.86B67.73B55.98B36.46B
Cash, Cash Equivalents and Short-Term Investments8.53B12.74B8.13B6.71B7.38B
Total Debt6.63B8.30B7.38B2.54B649.60M
Total Liabilities74.23B64.78B62.38B51.02B33.05B
Stockholders Equity6.71B6.08B5.36B4.96B3.41B
Cash Flow
Free Cash Flow-2.83B-442.90M2.10B-2.72B643.40M
Operating Cash Flow-2.74B-328.60M2.25B-2.65B670.20M
Investing Cash Flow-5.97B-2.16B-13.13B-14.71B-7.54B
Financing Cash Flow11.23B3.02B11.41B15.21B9.10B

Western Alliance Technical Analysis

Technical Analysis Sentiment
Positive
Last Price83.21
Price Trends
50DMA
77.46
Positive
100DMA
74.85
Positive
200DMA
80.94
Positive
Market Momentum
MACD
1.70
Positive
RSI
56.79
Neutral
STOCH
54.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WAL, the sentiment is Positive. The current price of 83.21 is above the 20-day moving average (MA) of 82.47, above the 50-day MA of 77.46, and above the 200-day MA of 80.94, indicating a bullish trend. The MACD of 1.70 indicates Positive momentum. The RSI at 56.79 is Neutral, neither overbought nor oversold. The STOCH value of 54.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$9.07B12.8111.60%1.43%4.30%10.10%
79
Outperform
$10.40B12.569.49%2.66%4.65%7.12%
78
Outperform
$8.70B15.0315.26%2.84%5.99%7.75%
76
Outperform
$8.87B12.8011.07%4.21%-7.80%15.43%
72
Outperform
$9.19B10.9912.58%1.81%7.06%14.94%
70
Outperform
$8.30B14.189.32%0.88%10.19%48.39%
68
Neutral
$17.10B11.449.70%3.58%11.11%-4.78%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
WAL
Western Alliance
83.21
3.28
4.10%
CMA
Comerica
67.48
16.60
32.63%
CFR
Cullen/Frost Bankers
135.35
19.14
16.47%
PNFP
Pinnacle Financial Partners
104.16
6.95
7.15%
WBS
Webster Financial
60.22
12.50
26.19%
WTFC
Wintrust Financial
132.80
24.46
22.58%

Western Alliance Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Western Alliance Announces New CFO Appointment
Positive
Jul 17, 2025

On July 14, 2025, Western Alliance Bancorporation announced a leadership transition, appointing Vishal Idnani as the new Chief Financial Officer effective January 2, 2026. Idnani, with extensive experience from J.P. Morgan, will replace Dale Gibbons, who will move to a new role focusing on deposit initiatives and innovation. This transition aims to enhance the company’s strategic initiatives and maintain its strong financial performance. Gibbons, having significantly contributed to the company’s growth and success, will continue to play a vital role in its future strategies.

The most recent analyst rating on (WAL) stock is a Buy with a $100.00 price target. To see the full list of analyst forecasts on Western Alliance stock, see the WAL Stock Forecast page.

Shareholder Meetings
Western Alliance Concludes Annual Stockholders Meeting
Neutral
Jun 11, 2025

On June 11, 2025, Western Alliance held its Annual Meeting of Stockholders, where 91.9% of the company’s shares were voted. During the meeting, all thirteen director nominees were elected, executive compensation was approved on a non-binding basis, and RSM US LLP was ratified as the independent auditor for the fiscal year ending December 31, 2025.

The most recent analyst rating on (WAL) stock is a Buy with a $100.00 price target. To see the full list of analyst forecasts on Western Alliance stock, see the WAL Stock Forecast page.

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.Date of analysis: Jul 22, 2025