Webster Financial (WBS) AI Stock Analysis

• Market Cap: $9.42B
• Dividend Yield: 2.85%
• Average Volume (3M): 1.57M
• Price to Earnings (P/E): 10.6
• Beta (1Y): 1.39
• Revenue Growth: 4.90%
• EPS Growth: 21.68%
• Country: US
• Employees: 4,297
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 1.60
• Shares Outstanding: 166,188,640
• 10 Day Avg. Volume: 1,536,912
• 30 Day Avg. Volume: 1,567,564
• PEG Ratio: -1.13
• Price to Book (P/B): 1.03
• Price to Sales (P/S): 2.25
• P/FCF Ratio: 6.85
• Enterprise Value/Market Cap: 1.43
• Enterprise Value/Revenue: 3.15
• Enterprise Value/Gross Profit: 5.42
• Enterprise Value/Ebitda: 11.41
• 1Y Price Target: $71.45
• Price Target Upside: 26.19% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: $64.00 ▲(13.03% Upside)

Webster Financial's strong financial performance and positive earnings call insights are the most significant factors driving the score. While technical indicators suggest a bearish trend, the company's attractive valuation and strategic growth opportunities in key segments provide a solid foundation for future growth.

Positive Factors

Loan and Deposit Growth

Consistent growth in loans and deposits indicates strong demand for Webster's financial services, supporting long-term revenue expansion and market presence.

HSA Bank Opportunities

Legislative changes expanding the HSA market can significantly boost Webster's deposit base, enhancing its competitive edge in healthcare financial services.

Asset Quality Improvement

Improved asset quality through reduced criticized loans strengthens Webster's financial stability and risk management, supporting sustainable growth.

Negative Factors

Narrowing Net Interest Margin

A declining net interest margin can pressure profitability, as it reflects reduced income from interest-earning assets relative to interest expenses.

Higher Noninterest Expenses

Rising noninterest expenses, particularly from incentive accruals, may strain profit margins and limit operational efficiency if not managed effectively.

Limited Improvement in Nonperforming Assets

Persistent nonperforming assets pose a risk to financial health, potentially impacting future earnings and necessitating ongoing management attention.

Webster Financial Business Overview & Revenue Model

Company Description

Webster Financial Corporation operates as the bank holding company for Webster Bank, National Association that provides a range of banking, investment, and financial services to individuals, families, and businesses in the United States. It operates through three segments: Commercial Banking, HSA Bank, and Retail Banking. The Commercial Banking segment provides lending, deposit, and cash management services; commercial and industrial lending and leasing, commercial real estate lending, equipment financing, and asset-based lending, as well as treasury and payment services; wealth management solutions to business owners, operators, and consumers; and trust, asset management, financial planning, insurance, retirement, and investment products. The HSA Bank segment offers health savings accounts, health reimbursement arrangements, flexible spending accounts, and commuter services that are distributed directly to employers and individual consumers, as well as through national and regional insurance carriers, consultants, and financial advisors. The Retail Banking segment provides deposit and fee-based services, residential mortgages, home equity lines, secured and unsecured loans, and credit cards to consumers. The company also offers online and mobile banking services. As of December 31, 2021, it operated 130 banking centers and 251 ATMs. The company was founded in 1935 and is headquartered in Stamford, Connecticut.

How the Company Makes Money

Webster Financial generates revenue primarily through interest income from loans and investments, as well as non-interest income from fees for various financial services. The bank makes money by lending at higher interest rates than the rates it pays on deposits, capturing the spread. Key revenue streams include commercial and residential loans, consumer banking services, wealth management fees, and service charges on deposit accounts. Additionally, Webster may enter into strategic partnerships and alliances that enhance its product offerings, expand its customer base, and contribute to its overall earnings.

Webster Financial Financial Statement Overview

Summary

Webster Financial exhibits strong financial performance with consistent revenue and profit growth, efficient cash flow management, and a balanced approach to leverage. Minor cost pressures are noted, but overall profitability and cash generation capabilities are robust.

Income Statement

Webster Financial demonstrates strong profitability with a consistent increase in revenue and net income over the years. The TTM data shows a gross profit margin of 58.25% and a net profit margin of 20.06%, indicating efficient cost management and strong earnings. The revenue growth rate is positive, albeit modest, suggesting steady expansion. However, the slight decline in gross profit margin from 2023 to TTM indicates potential cost pressures.

Balance Sheet

The company's balance sheet reflects a healthy financial position with a debt-to-equity ratio of 0.49 in TTM, indicating moderate leverage. The return on equity is solid at 9.29%, showcasing effective utilization of equity to generate profits. However, the equity ratio is not explicitly provided, which limits a comprehensive assessment of asset financing.

Cash Flow

Webster Financial's cash flow statement reveals robust free cash flow generation with a growth rate of 3.46% in TTM. The operating cash flow to net income ratio is low, suggesting potential reinvestment or debt servicing. The free cash flow to net income ratio is high at 96.63%, indicating strong cash conversion efficiency. The overall cash flow health is positive, supporting operational and strategic flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.27B	4.17B	3.94B	2.72B	1.26B	1.29B
Gross Profit	2.49B	2.36B	2.50B	2.19B	1.28B	1.04B
EBITDA	1.18B	1.09B	1.16B	879.78M	575.37M	323.15M
Net Income	856.52M	768.71M	867.84M	644.28M	408.86M	220.62M
Balance Sheet
Total Assets	81.91B	79.03B	74.95B	71.28B	34.92B	32.59B
Cash, Cash Equivalents and Short-Term Investments	2.99B	2.08B	10.68B	8.73B	4.70B	3.59B
Total Debt	4.62B	3.36B	3.87B	7.69B	1.39B	1.88B
Total Liabilities	72.58B	69.89B	66.26B	63.22B	31.48B	29.36B
Stockholders Equity	9.34B	9.13B	8.69B	8.06B	3.44B	3.23B
Cash Flow
Free Cash Flow	1.26B	1.37B	938.35M	1.31B	672.00M	359.27M
Operating Cash Flow	1.30B	1.40B	978.65M	1.34B	688.59M	380.55M
Investing Cash Flow	-3.68B	-3.87B	-2.60B	-7.19B	-2.41B	-2.29B
Financing Cash Flow	3.84B	2.82B	2.49B	6.23B	1.91B	1.91B

Webster Financial Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 56.62
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WBS, the sentiment is Negative. The current price of 56.62 is above the 20-day moving average (MA) of 56.45, below the 50-day MA of 59.06, and above the 200-day MA of 54.82, indicating a neutral trend. The MACD of -0.53 indicates Negative momentum. The RSI at 46.23 is Neutral, neither overbought nor oversold. The STOCH value of 55.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WBS.

Webster Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WTFC	78 Outperform	$8.69B	11.92	11.69%	1.55%	3.61%	13.93%
WBS	76 Outperform	$9.42B	10.56	9.95%	2.85%	4.90%	21.68%
CMA	73 Outperform	$9.88B	14.81	9.64%	3.73%	-7.07%	31.09%
WAL	69 Neutral	$8.52B	9.57	12.79%	1.98%	6.30%	25.28%
UMBF	68 Neutral	$8.14B	12.12	11.06%	1.42%	38.81%	10.38%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
SSB	66 Neutral	$8.84B	12.07	9.32%	2.60%	33.87%	12.26%

Webster Financial Corporate Events

Webster Financial Adjusts Compensation for CFO Neal Holland

On October 23, 2025, Webster Financial Corporation’s Board of Directors approved compensation adjustments for Senior Executive Vice President and CFO Neal Holland. The adjustments include a $500,000 grant of restricted stock and revised salary and incentive targets, recognizing his contributions to the company’s strategic plan.

The most recent analyst rating on (WBS) stock is a Buy with a $68.00 price target. To see the full list of analyst forecasts on Webster Financial stock, see the WBS Stock Forecast page.

Webster Financial Corp’s Earnings Call Highlights Growth and Optimism

Webster Financial Corporation’s recent earnings call painted a picture of robust financial health, underscored by significant growth in loans, deposits, and capital generation. Despite challenges in maintaining net interest margins and managing expenses, the company expressed optimism about future opportunities, particularly in its HSA Bank and the Marathon joint venture.

Webster Financial Reports Record Q3 2025 Earnings

Webster Financial Corporation reported a significant increase in net income for the third quarter of 2025, with earnings per share rising to $1.54 from $1.10 in the same period in 2024. The company’s revenue reached $732.6 million, and it saw growth in both loans and deposits. Despite a slight decrease in net interest margin, Webster’s strategic positioning allowed it to achieve record quarterly earnings per share on its 90th anniversary. The company also maintained strong asset quality and capital ratios, reflecting its robust financial health and operational efficiency.

The most recent analyst rating on (WBS) stock is a Buy with a $68.00 price target. To see the full list of analyst forecasts on Webster Financial stock, see the WBS Stock Forecast page.

Webster Financial Issues $350M Subordinated Notes

On September 4, 2025, Webster Financial Corporation entered into an underwriting agreement with several major financial institutions to sell $350 million in subordinated notes. The notes, issued on September 11, 2025, will mature in 2035 and bear a fixed interest rate of 5.784% until 2030, after which the rate will reset based on the U.S. Treasury Rate plus a spread. This move is part of a registered public offering and reflects the company’s strategic financial maneuvers to secure capital.

The most recent analyst rating on (WBS) stock is a Buy with a $70.00 price target. To see the full list of analyst forecasts on Webster Financial stock, see the WBS Stock Forecast page.