Webster Financial (WBS) AI Stock Analysis

• Market Cap: $10.45B
• Dividend Yield: 2.49%
• Average Volume (3M): 1.16M
• Price to Earnings (P/E): 12.1
• Beta (1Y): 1.25
• Revenue Growth: 4.78%
• EPS Growth: 21.68%
• Country: US
• Employees: 4,297
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 1.60
• Shares Outstanding: 161,290,300
• 10 Day Avg. Volume: 806,097
• 30 Day Avg. Volume: 1,155,737
• 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: 1.31
• Enterprise Value/Revenue: 3.16
• Enterprise Value/Gross Profit: 5.31
• Enterprise Value/Ebitda: 10.80
• 1Y Price Target: $75.00
• Price Target Upside: 18.67% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: $74.00 ▲(17.09% Upside)

WBS scores well on core financial performance and a constructive technical trend, supported by reasonable valuation. The biggest constraints are cash-flow softness and banking headwinds noted on the earnings call (net interest margin compression, higher expenses, and a flat near-term NII outlook).

Positive Factors

Profitability

Sustained high net and EBIT margins demonstrate persistent operating efficiency and pricing power in core lending and fee businesses. This margin profile provides a durable earnings buffer through credit cycles and funds reinvestment, dividend capacity, and strategic initiatives.

Capital Generation & Returns

Strong returns on tangible equity and asset base, plus tangible book growth and executed share repurchases, indicate disciplined capital allocation. This enhances long-term shareholder value while preserving capacity to fund growth, investments, or buffer credit losses when needed.

Structural Deposit Tailwind (HSA)

Expected legislative expansion of the HSA addressable market is a multi-year, low-cost deposit growth opportunity for HSA Bank. Incremental core deposits strengthen funding stability, reduce wholesale funding reliance, and support sustainable loan growth and net interest income over time.

Negative Factors

Net Interest Margin Pressure

Ongoing NIM compression reflects tightening loan-deposit spreads and competitive funding pressures. With management signaling lower near-term NIM and flat NII, sustained margin pressure could constrain medium-term earnings power and limit the bank's ability to grow ROA and ROE.

Weak Free Cash Flow Momentum

A material decline in FCF growth reduces internal funding available for capital reinvestment, acquisitions, or shareholder distributions. Even with high FCF-to-net-income, deteriorating FCF momentum raises concern about funding flexibility and resilience under stress or rising capital needs.

Rising Noninterest Expenses

Rising operating costs, including higher incentive accruals, erode operating leverage and offset revenue gains. Combined with only limited improvement in nonperforming assets, higher expense trends can pressure margins and reduce the room to absorb future credit costs or invest in growth initiatives.

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 and non-interest income. Interest income is derived from loans and leases, which include personal loans, commercial loans, and mortgages. The interest earned on these financial products constitutes a significant portion of the company's earnings. Additionally, Webster Financial earns non-interest income from service fees, asset management fees, and trading activities. The bank may also benefit from strategic partnerships and collaborations with other financial institutions or technology firms that enhance its service offerings and expand its customer base. Overall, the company’s diversified revenue streams and focus on core banking activities contribute to its financial performance.

Webster Financial Financial Statement Overview

Summary

Webster Financial shows strong revenue growth and profitability, with a solid balance sheet and efficient operations. However, the decline in free cash flow growth and slight increase in leverage are concerns.

Income Statement

Webster Financial demonstrates strong revenue growth with a TTM increase of 1.58% and consistent profitability, as evidenced by a solid net profit margin of 21.32% and an EBIT margin of 27.58%. The company has maintained healthy gross and EBITDA margins, indicating efficient operations. However, the slight decline in gross profit margin over time suggests potential cost pressures.

Balance Sheet

The balance sheet reflects a strong equity position with a low debt-to-equity ratio of 0.13 in the TTM period, indicating prudent financial management. The return on equity is robust at 9.96%, showcasing effective use of shareholder funds. However, the equity ratio has slightly decreased, suggesting increased leverage compared to previous years.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth by 30.16% in the TTM period, which could be a concern for future liquidity. Despite this, the company maintains a high free cash flow to net income ratio of 96.63%, indicating strong cash generation relative to earnings. The operating cash flow to net income ratio is low, suggesting potential volatility in cash flow generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.34B	4.17B	3.94B	2.72B	1.26B	1.29B
Gross Profit	2.58B	2.36B	2.50B	2.19B	1.28B	1.04B
EBITDA	1.27B	1.09B	1.16B	879.78M	575.37M	323.15M
Net Income	924.75M	768.71M	867.84M	644.28M	408.86M	220.62M
Balance Sheet
Total Assets	83.19B	79.03B	74.95B	71.28B	34.92B	32.59B
Cash, Cash Equivalents and Short-Term Investments	3.06B	2.08B	10.68B	8.73B	4.70B	3.59B
Total Debt	3.91B	3.36B	3.87B	7.69B	1.39B	1.88B
Total Liabilities	73.73B	69.89B	66.26B	63.22B	31.48B	29.36B
Stockholders Equity	9.46B	9.13B	8.69B	8.06B	3.44B	3.23B
Cash Flow
Free Cash Flow	1.59B	1.37B	938.35M	1.31B	672.00M	359.27M
Operating Cash Flow	1.63B	1.40B	978.65M	1.34B	688.59M	380.55M
Investing Cash Flow	-4.22B	-3.87B	-2.60B	-7.19B	-2.41B	-2.29B
Financing Cash Flow	2.46B	2.82B	2.49B	6.23B	1.91B	1.91B

Webster Financial Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 63.20
• 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 63.2 is below the 20-day moving average (MA) of 64.33, above the 50-day MA of 60.90, and above the 200-day MA of 56.02, indicating a neutral trend. The MACD of 0.90 indicates Positive momentum. The RSI at 49.17 is Neutral, neither overbought nor oversold. The STOCH value of 53.94 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
SSB	79 Outperform	$9.82B	13.41	9.32%	2.38%	33.87%	12.26%
WTFC	78 Outperform	$9.77B	13.41	11.69%	1.40%	3.58%	13.93%
UMBF	77 Outperform	$9.23B	13.75	11.06%	1.37%	38.81%	10.38%
WBS	76 Outperform	$10.45B	12.06	9.80%	2.49%	4.78%	21.68%
WAL	71 Outperform	$9.92B	11.14	12.79%	1.80%	6.30%	25.28%
CMA	69 Neutral	$11.69B	17.51	9.64%	3.21%	-7.07%	31.09%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

Webster Financial Corporate Events

Webster Financial Appoints New Chief Accounting Officer

On January 6, 2026, Webster Financial Corporation appointed Kristen Antonopoulos as Chief Accounting Officer, replacing Gregory S. Madar in that role while he continues as Senior Managing Director, Corporate Controller of Webster Bank. Antonopoulos brings more than 20 years of finance and accounting experience, including nearly two decades at American Express, and will join Webster’s executive compensation and benefits programs under standard corporate agreements that include change-in-control and non-competition provisions, underscoring the company’s focus on strengthening its senior financial leadership and governance framework.

The most recent analyst rating on (WBS) stock is a Buy with a $72.00 price target. To see the full list of analyst forecasts on Webster Financial stock, see the WBS Stock Forecast page.

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 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.