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Walker & Dunlop (WD)
NYSE:WD
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Walker & Dunlop
(NYSE:WD)
Rating:49Neutral
Price Target:
$67.00
▼(-7.36%Downside)
Positive Factors
Business Diversification
WD's diverse business operations, including debt brokerage, investment sales, and asset management, contribute to over 70% of its cash flow from servicing and associated fees.
Market Position
WD has a strong market position with an 8% market share of multifamily debt originations, ranking #1 with Fannie Mae and #4 with Freddie Mac.
Valuation
WD's valuation is considered attractive at 13.3-15.5x 2025-2026E cash earnings, with potential for further improvement if GSE volumes exceed estimates.
Negative Factors
Market Supply
The multifamily market is expected to see an uptick in transactions due to projected increases in demand and a slowdown in supply, benefiting companies like WD.
Walker & Dunlop (WD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.46B
Dividend Yield3.8%
Average Volume (3M)254.69K
Price to Earnings (P/E)24.8
Beta (1Y)1.13
Revenue Growth6.68%
EPS Growth6.08%
CountryUS
Employees1,394
SectorFinancial
Sector Strength79
IndustryFinancial - Mortgages
Share Statistics
EPS (TTM)0.08
Shares Outstanding33,981,533
10 Day Avg. Volume367,861
30 Day Avg. Volume254,689
Financial Highlights & Ratios
PEG Ratio-0.53
Price to Book (P/B)1.50
Price to Sales (P/S)0.00
P/FCF Ratio1.63
Enterprise Value/Market Cap1.45
Enterprise Value/Revenue0.81
Enterprise Value/Gross Profit5.08
Enterprise Value/Ebitda2.42
Forecast
1Y Price Target
$95.00Price Target Upside31.36% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Walker & Dunlop Business Overview & Revenue Model
Company DescriptionWalker & Dunlop, Inc., through its subsidiaries, originates, sells, and services a range of multifamily and other commercial real estate financing products and services for owners and developers of real estate in the United States. The company offers first mortgage, second trust, supplemental, construction, mezzanine, preferred equity, small-balance, and bridge/interim loans. It also provides multifamily finance for manufactured housing communities, student housing, affordable housing, and senior housing properties under the Fannie Mae's DUS program; and construction and permanent loans to developers and owners of multifamily housing, affordable housing, senior housing, and healthcare facilities. In addition, the company acts as an intermediary in the placement of commercial real estate debt between institutional sources of capital, including life insurance companies, investment banks, commercial banks, pension funds, CMBS conduits, and other institutional investors, as well as owners of various types of commercial real estate. Further, it advises on capital structure; develops the financing package; facilitates negotiations between its client and institutional sources of capital; coordinates due diligence; and assists in closing the transaction. Additionally, the company offers property sales brokerage, underwriting and risk management, and servicing and asset management services. Walker & Dunlop, Inc. was founded in 1937 and is headquartered in Bethesda, Maryland.
How the Company Makes MoneyWalker & Dunlop generates revenue primarily through its loan origination and servicing platforms. The company earns origination fees from arranging and securing financing for commercial real estate properties, often partnering with government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac, as well as other institutional investors. Additionally, Walker & Dunlop earns servicing fees by managing and servicing the loans over their lifespan. The company also derives income from investment sales services, earning commissions from facilitating property sales transactions. Furthermore, Walker & Dunlop offers advisory services, providing strategic guidance and research to real estate investors and developers, contributing to its revenue streams. The company's strong partnerships with GSEs and a broad network of capital sources are significant factors in its ability to generate earnings.
Walker & Dunlop Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: -4.65%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a balanced outlook with positive momentum in transaction volume, especially in the multifamily sector, and strategic expansions and hiring. However, financial challenges such as a decline in GAAP EPS, loan loss reserves, and debt brokerage volume were noted. The overall sentiment is balanced with optimism for the future.Q1-2025 Updates
Positive Updates
Solid Q1 Transaction Volume
Walker & Dunlop delivered a healthy Q1 total transaction volume of $7 billion, up 10% from last year, which drove total revenue growth of 4%.
Strong Multifamily Sector Performance
88% of Q1 volume was in multifamily assets, with Fannie Mae originations up 67% from last year, and investment sales volume up 58%.
Strategic Expansion and Hiring
The company added a senior banker to the New York Capital Markets team, entered the hospitality investment sales space, opened a new office in London, and hired a banker to lead growth in the data center space.
Strong Capital Markets Segment Growth
Total revenues for the Capital Markets segment grew 25% to $103 million, with Zelman growing its revenues by 129% due to closing several investment banking transactions.
Positive Sentiment in Q2 Pipeline
The company has already closed 60% of Q1 transaction activity in the first month of Q2, with a promising market outlook for the second quarter and beyond.
Negative Updates
Decline in GAAP EPS
GAAP EPS was only $0.08, down significantly due to personnel costs, fees associated with the debt offering, and additions to the loan loss reserve.
Loan Loss Reserves Increase
Recognized a provision for loan losses of $4 million this quarter compared to $500,000 a year ago, primarily related to a single loan.
Debt Brokerage Volume Decline
Debt brokerage team had a slow Q1 with $2.6 billion of volume compared to $3.3 billion in Q1 of 2024, primarily due to a timing issue.
Non-Cash MSR and Core Earnings Decline
Adjusted EBITDA declined to $65 million and adjusted core earnings per share declined to $0.85.
Company Guidance
During the Q1 2025 earnings call, Walker & Dunlop provided guidance indicating a continuation of strong performance, particularly in the multifamily sector, which accounted for 88% of its $7 billion total transaction volume, a 10% increase from the previous year. Revenue grew by 4%, driven by significant increases in Fannie Mae originations, up 67%, and investment sales, up 58%. Despite seeing a decline in GAAP EPS to $0.08 and adjusted EBITDA to $65 million due to personnel costs and debt refinancing fees, the company remains optimistic about 2025, aiming for $200 million in transaction volume per banker and broker, and plans to raise $600 million in tax credit syndications. Walker & Dunlop expects to benefit from a strategic entry point in the North American commercial real estate market, with nearly $200 billion of equity dry powder ready to invest, particularly as multifamily demand is projected to grow while construction starts decline, potentially leading to an undersupplied market by 2026.Walker & Dunlop Financial Statement Overview
Summary
Walker & Dunlop faces challenges in maintaining profitability and cash flow stability, despite stable revenue levels. The increased leverage and negative operating cash flow signal potential financial risks, although cost management has improved.Income Statement
Walker & Dunlop's TTM (Trailing-Twelve-Months) revenue shows a slight increase from the previous year, with a revenue growth rate of approximately 0.82%. However, the company experienced a decline in net profit margin to 8.67% compared to 9.55% in the previous year, indicating pressure on profitability. The gross profit margin improved to 61.30%, suggesting better cost management, but EBIT margin fell to 9.42%, reflecting potential inefficiencies in operations.60
Neutral
Balance Sheet
The company has a solid equity base with an equity ratio of 38.39%, providing a buffer against liabilities. However, the debt-to-equity ratio has increased to 1.01, indicating higher leverage which could pose risks in a rising interest rate environment. The return on equity (ROE) has decreased to 5.72%, showing reduced efficiency in generating profits from shareholders' equity.55
Neutral
Cash Flow
Operating cash flow has turned negative in the TTM period, signaling potential liquidity concerns. The free cash flow to net income ratio is also negative, highlighting challenges in converting income into cash. The negative free cash flow growth rate indicates declining cash generation capability.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.14B | 1.13B | 1.05B | 1.26B | 1.26B | 1.08B |
| Gross Profit | 700.10M | 503.56M | 471.67M | 617.15M | 647.71M | 606.34M |
| EBITDA | 373.92M | 369.23M | 363.50M | 500.00M | 569.23M | 499.28M |
| Net Income | 99.06M | 108.17M | 107.36M | 213.82M | 265.76M | 246.18M |
Balance Sheet | ||||||
| Total Assets | 4.51B | 4.38B | 4.05B | 4.05B | 5.21B | 4.65B |
| Cash, Cash Equivalents and Short-Term Investments | 180.97M | 279.27M | 328.70M | 225.95M | 305.63M | 321.10M |
| Total Debt | 1.76B | 1.66B | 1.47B | 1.32B | 2.68B | 2.81B |
| Total Liabilities | 2.77B | 2.62B | 2.31B | 2.33B | 3.47B | 3.45B |
| Stockholders Equity | 1.73B | 1.75B | 1.72B | 1.69B | 1.55B | 1.20B |
Cash Flow | ||||||
| Free Cash Flow | -203.51M | 116.40M | -16.72M | 1.56B | 861.25M | -1.41B |
| Operating Cash Flow | -190.15M | 129.36M | -518.00K | 1.58B | 870.46M | -1.41B |
| Investing Cash Flow | -48.47M | -38.13M | 126.87M | -133.78M | -377.55M | 115.18M |
| Financing Cash Flow | 191.45M | -154.73M | 6.77M | -1.58B | -457.73M | 1.52B |
Walker & Dunlop Technical Analysis
Neutral
72.32
Price Trends
70.83
Positive
76.96
Negative
90.08
Negative
Market Momentum
>-0.01
Negative
58.76
Neutral
87.34
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WD, the sentiment is Neutral. The current price of 72.32 is above the 20-day moving average (MA) of 69.15, above the 50-day MA of 70.83, and below the 200-day MA of 90.08, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 58.76 is Neutral, neither overbought nor oversold. The STOCH value of 87.34 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WD.
Walker & Dunlop Risk Analysis
Walker & Dunlop disclosed 29 risk factors in its most recent earnings report. Walker & Dunlop reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Walker & Dunlop Peers Comparison
Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $9.74B | 17.28 | 12.39% | ― | 6.44% | -7.86% | |
67 Neutral | $16.85B | 11.65 | 9.71% | 3.90% | 11.61% | -9.60% | |
62 Neutral | $5.24B | 15.57 | 9.32% | 1.20% | 23.79% | 121.61% | |
57 Neutral | $1.23B | 28.49 | 3.71% | 2.53% | 42.92% | 64.72% | |
56 Neutral | $28.96B | 68.51 | 0.45% | ― | 24.58% | -88.86% | |
49 Neutral | $2.46B | 24.80 | 5.62% | 3.80% | 6.68% | 6.08% | |
48 Neutral | $425.58M | ― | -29.48% | ― | 3.76% | 16.19% |
* Financial Sector Average
Performance Comparison
WD
Walker & Dunlop
72.32
-20.25
-21.88%
PFSI
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101.47
8.67
9.34%
COOP
Mr Cooper Group
152.18
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87.32%
LDI
loanDepot
1.29
-0.32
-19.88%
RKT
Rocket Companies
14.48
1.37
10.45%
GHLD
Guild Holdings
19.78
5.89
42.40%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.