Webster Financial (WBS) AI Stock Analysis

• Market Cap: $9.61B
• Dividend Yield: 2.68%
• Average Volume (3M): 1.48M
• Price to Earnings (P/E): 11.1
• Beta (1Y): 1.28
• 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: 1,109,613
• 30 Day Avg. Volume: 1,480,304
• 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: 3.16
• Enterprise Value/Gross Profit: 5.31
• Enterprise Value/Ebitda: 10.80
• 1Y Price Target: $71.64
• Price Target Upside: 20.20% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): 5.88
• Revenue Forecast (FY): $2.90B

• Rating: 75 Outperform
• Price Target: $64.00 ▲(7.38% Upside)

Webster Financial's strong financial performance and attractive valuation are key strengths, supported by positive earnings call insights. Technical indicators are neutral, and the company faces some challenges in managing margins and expenses.

Positive Factors

Strong Financial Performance

The company's strong financial metrics, including high return on equity and asset growth, indicate robust operational efficiency and effective capital management, supporting long-term stability.

Growth in HSA Bank Opportunities

Legislative changes expanding the HSA market could significantly boost Webster's deposit base, enhancing its competitive position and revenue potential over the long term.

Successful Start to Marathon Joint Venture

The joint venture with Marathon Asset Management diversifies revenue streams and leverages new market opportunities, strengthening Webster's strategic positioning.

Negative Factors

Narrowing Net Interest Margin

A narrowing net interest margin could pressure profitability, as it reduces the spread between lending and deposit rates, impacting long-term earnings potential.

Higher Noninterest Expenses

Rising noninterest expenses can erode profit margins, necessitating cost management improvements to maintain financial health and operational efficiency.

Limited Improvement in Nonperforming Assets

Persistent nonperforming assets can strain resources and limit financial flexibility, posing a risk to asset quality and long-term 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 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: Positive
• Last Price: 59.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WBS, the sentiment is Positive. The current price of 59.6 is above the 20-day moving average (MA) of 57.06, above the 50-day MA of 57.45, and above the 200-day MA of 54.37, indicating a bullish trend. The MACD of 0.48 indicates Negative momentum. The RSI at 61.31 is Neutral, neither overbought nor oversold. The STOCH value of 88.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	$8.98B	12.31	11.69%	1.49%	3.58%	13.93%
SSB	76 Outperform	$9.02B	12.32	9.32%	2.55%	33.87%	12.26%
WBS	75 Outperform	$9.61B	11.10	9.80%	2.68%	4.78%	21.68%
CMA	73 Outperform	$10.27B	15.38	9.64%	3.73%	-7.07%	31.09%
WAL	69 Neutral	$8.97B	10.08	12.79%	1.91%	6.30%	25.28%
UMBF	68 Neutral	$8.51B	12.67	11.06%	1.42%	38.81%	10.38%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

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.