Webster Financial (WBS) AI Stock Analysis

• Market Cap: $10.00B
• Dividend Yield: 2.67%
• Average Volume (3M): 1.27M
• Price to Earnings (P/E): 12.2
• Beta (1Y): 1.36
• Revenue Growth: 4.73%
• EPS Growth: 7.12%
• Country: US
• Employees: 4,297
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 1.53
• Shares Outstanding: 166,188,640
• 10 Day Avg. Volume: 1,592,897
• 30 Day Avg. Volume: 1,272,395
• 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: 1.38
• Enterprise Value/Revenue: 3.23
• Enterprise Value/Gross Profit: 5.54
• Enterprise Value/Ebitda: 11.68
• 1Y Price Target: $70.77
• Price Target Upside: 18.27% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16

• Rating: 78 Outperform
• Price Target: $71.00 ▲(18.65% Upside)

Webster Financial's strong financial performance and positive earnings call sentiment are the most significant factors driving the score. Technical analysis and valuation provide additional support, though some caution is warranted due to potential cost pressures and competitive deposit market challenges.

Positive Factors

Revenue Growth

Consistent revenue growth indicates Webster Financial's ability to expand its market presence and enhance its financial stability over time.

Asset Quality Improvement

Improving asset quality reduces risk and enhances financial resilience, supporting long-term profitability and stability.

Strategic Partnerships

Strategic partnerships can enhance revenue streams and market competitiveness, contributing to sustainable growth.

Negative Factors

Net Interest Margin Decline

A declining net interest margin can pressure profitability, impacting long-term earnings potential and financial performance.

Deposit Cost Increase

Rising deposit costs can squeeze margins and limit competitive pricing flexibility, affecting long-term financial health.

Executive Resignation

Leadership changes can introduce uncertainty and disrupt strategic continuity, potentially impacting long-term execution and stability.

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: Neutral
• Last Price: 59.84
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WBS, the sentiment is Neutral. The current price of 59.84 is below the 20-day moving average (MA) of 61.27, above the 50-day MA of 59.67, and above the 200-day MA of 54.54, indicating a neutral trend. The MACD of 0.13 indicates Positive momentum. The RSI at 46.19 is Neutral, neither overbought nor oversold. The STOCH value of 31.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WBS.

Webster Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UMBF	80 Outperform	9.07B	13.64	7.25%	1.34%	30.40%	12.40%
WTFC	79 Outperform	8.97B	12.63	10.24%	1.45%	4.74%	10.10%
WBS	78 Outperform	$10.00B	12.22	9.34%	2.67%	4.73%	7.12%
SSB	77 Outperform	10.24B	14.88	6.72%	2.19%	21.10%	7.74%
CMA	75 Outperform	8.92B	13.25	10.57%	4.09%	-8.62%	15.37%
WAL	74 Outperform	9.74B	11.60	11.89%	1.72%	7.14%	14.94%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

Webster Financial Corporate Events

Webster Financial Announces Executive Resignation

On July 18, 2025, Albert J. Wang announced his resignation as Executive Vice President and Chief Accounting Officer of Webster Financial Corporation and Webster Bank, effective September 2, 2025, to pursue another professional opportunity. Gregory S. Madar will assume the role of Interim Chief Accounting Officer starting September 3, 2025, while the company searches for a permanent replacement.

Webster Financial Reports Strong Q2 2025 Results

Webster Financial Corporation reported strong financial results for the second quarter of 2025, with net income applicable to common stockholders of $251.7 million, or $1.52 per diluted share, compared to $175.5 million, or $1.03 per diluted share, in the same quarter of 2024. The company experienced growth in revenue, loans, and deposits, with improved asset quality metrics and a lower provision for credit losses. The financial performance highlights Webster’s solid growth and strategic positioning, indicating a positive outlook for future business opportunities and shareholder returns.

Webster Financial Appoints New Board Member and CRO

On June 25, 2025, Webster Financial Corporation announced the appointment of Frederick J. Crawford to its Board of Directors, effective July 1, 2025, expanding the board from 12 to 13 members. Crawford, recognized as an independent director and financial expert, will serve on the Audit and Risk Committees. Additionally, Jason E. Schugel was appointed as Chief Risk Officer and Executive Vice President, effective July 14, 2025, succeeding Daniel Bley, who will retire but remain temporarily in an advisory role. Schugel brings extensive experience in risk management from his previous role at Ally Bank. These appointments are expected to enhance Webster’s strategic capabilities and governance as it continues to grow and navigate the regulatory landscape.