Webster Financial (WBS) AI Stock Analysis

• Market Cap: $10.61B
• Dividend Yield: 2.49%
• Average Volume (3M): 1.22M
• Price to Earnings (P/E): 11.1
• Beta (1Y): 1.27
• Revenue Growth: 4.78%
• EPS Growth: 21.68%
• Country: US
• Employees: 4,297
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 1.59
• Shares Outstanding: 161,290,300
• 10 Day Avg. Volume: 1,692,590
• 30 Day Avg. Volume: 1,218,507
• 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: 1.03
• Enterprise Value/Revenue: 2.53
• Enterprise Value/Gross Profit: 4.25
• Enterprise Value/Ebitda: 8.64
• 1Y Price Target: $75.42
• Price Target Upside: 14.27% 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: $75.00 ▲(13.64% Upside)

The score is driven primarily by solid underlying financial performance and balance-sheet strength, tempered by weaker recent free-cash-flow growth. Technicals are supportive with a clear uptrend and positive momentum. Valuation is reasonable for the profile, and the latest earnings call reinforced constructive 2026 guidance and capital return, albeit with deposit competition and expense pressure to monitor.

Positive Factors

High profitability and returns

Sustained high ROTCE and improving ROA indicate the franchise converts earned revenue into shareholder returns efficiently. Durable profitability supports reinvestment, organic growth, buybacks and higher loss-absorbing capacity, strengthening long-term capital allocation optionality.

Prudent capital and low leverage

A low debt-to-equity ratio and CET1 near 11% provide a durable capital cushion versus peers. That balance-sheet strength funds organic growth, supports continued buybacks and absorb losses from stressed CRE pockets without forcing dilutive capital actions.

Diversified growth initiatives

Strategic expansion into HSA and fintech verticals plus targeted tuck-ins diversifies deposit sources and fee income across products and channels. Multi-year deposit targets (HSA $1–2.5B over five years) improve structural funding stability and noninterest income resilience.

Negative Factors

Weak free cash flow momentum

A marked decline in free cash flow growth signals potential volatility in cash conversion from earnings. Over months, this can constrain organic investment, limit flexibility for buybacks/dividends and force reliance on capital markets if operating cash generation remains inconsistent.

Deposit competition and repricing pressure

Sustained deposit competition in the regional footprint increases funding costs and forces higher pricing of core deposits. Over 2–6 months, this can compress NIM if loan yields lag and requires trade-offs between growth and margin preservation or increases reliance on higher-cost wholesale funding.

Concentrated problem loan pockets

Material CRE and health-care concentrations present persistent credit risk even as classified loans fall. These pockets can generate episodic charge-offs or longer workout timelines, pressuring reserves and earnings volatility and limiting capital deployment until resolution completes.

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

Strong profitability (net margin 21.32%, EBIT margin 27.58%) and prudent leverage (debt-to-equity 0.13) support a solid financial profile. The main offset is weaker cash-flow momentum, with free cash flow growth down 30.16% TTM and indications of volatility in cash generation.

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: 66.00
• 50DMA: Positive
• 100DMA: Positive
• 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 Positive. The current price of 66 is above the 20-day moving average (MA) of 64.74, above the 50-day MA of 63.20, and above the 200-day MA of 57.39, indicating a bullish trend. The MACD of 0.63 indicates Negative momentum. The RSI at 58.75 is Neutral, neither overbought nor oversold. The STOCH value of 60.83 is Neutral, 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
SSB	82 Outperform	$10.29B	13.00	10.68%	2.38%	33.87%	12.26%
WTFC	79 Outperform	$9.88B	12.94	12.11%	1.40%	3.58%	13.93%
UMBF	76 Outperform	$9.66B	13.69	12.59%	1.37%	38.81%	10.38%
WBS	76 Outperform	$10.61B	11.15	10.81%	2.49%	4.78%	21.68%
CMA	70 Outperform	$11.33B	16.79	10.09%	3.21%	-7.07%	31.09%
WAL	69 Neutral	$9.81B	10.21	13.50%	1.80%	6.30%	25.28%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

Webster Financial Corporate Events

Webster Financial Posts Strong Fourth-Quarter 2025 Results

On January 23, 2026, Webster Financial reported strong fourth-quarter 2025 results, posting net income applicable to common stockholders of $248.7 million, or $1.55 per diluted share, up from $171.8 million, or $1.01 per share, a year earlier, with adjusted EPS rising to $1.59 from $1.43. Revenue reached $746.2 million, supported by growth in loans and leases to $56.6 billion and deposits to $68.8 billion, while net interest income increased year-on-year despite a modest compression in net interest margin to 3.35%. Credit quality metrics remained stable, with provision for credit losses down from a year ago and non-performing loans holding at 0.88% of total loans, as the allowance for credit losses covered 144% of non-performing loans. Capital and profitability indicators were robust, with a return on average tangible common equity of 17.10%, a common equity tier 1 ratio of 11.22%, and higher book and tangible book value per share, even as Webster absorbed a $20 million charitable contribution, technology and human capital investments, and other one-time items while also repurchasing 3.6 million shares, underscoring management’s confidence in the bank’s financial strength and its scale-building strategy in its 90th anniversary year.

The most recent analyst rating on (WBS) stock is a Buy with a $71.00 price target. To see the full list of analyst forecasts on Webster Financial stock, see the WBS Stock Forecast page.

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.