VLY

We rate VALLEY NATIONAL BANCORP (VLY) as a Hold with a composite score of 52.9/100 at a current price of $12.88. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in momentum (81th percentile) and value (48th percentile), which together account for the majority of the composite score. Offsetting weakness in quality (31th percentile) and investment (45th percentile) tempers our overall conviction. We assign a No Moat rating (26/100), High uncertainty, and Poor capital allocation.

Key items to watch: whether strong momentum is fundamentally supported by revenue trends; balance sheet deleveraging progress. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

VALLEY NATIONAL BANCORP holds a top-quartile position (#0 of 50) within the Finance, Insurance, And Real Estate sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 52.9/100 places it at rank #1537 in our full 7,333-stock universe. At $5.9B in market capitalization, VALLEY NATIONAL BANCORP is a mid-cap player in the Finance, Insurance, And Real Estate space, which limits certain scale advantages but may allow for more agile strategic execution.

Despite positive momentum (81th percentile), revenue contraction of -1% creates a divergence between price action and fundamental trajectory. This divergence suggests either that the market is looking through near-term weakness or that technical factors are temporarily inflating the stock. Investors should assess whether the revenue decline reflects cyclical weakness or structural challenges.

The margin cascade tells an important story: gross margins of 0% (-76.5pp vs sector) narrow to operating margins of 22% (+4.5pp vs sector) and net margins of 17.6%, yielding a gross-to-net conversion rate of N/A%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.

At a current price of $12.88, VALLEY NATIONAL BANCORP is trading near fair value based on current fundamentals. Our value factor score of 48/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 14.9x (a 25% premium to the sector median of 11.9x), EV/EBITDA of 11.2x (at a premium), P/B of 1.0x, P/S of 2.6x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a High uncertainty rating to VALLEY NATIONAL BANCORP. Key risk factors include significant leverage (719% debt-to-equity), weak quality scores (31th percentile). The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: significant leverage (719% debt-to-equity); weak quality scores (31th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 46th percentile and quality factor at the 31th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: a 4.19% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.

We rate VALLEY NATIONAL BANCORP's capital allocation as Poor. Key concerns include elevated leverage (719% D/E), weak asset returns (ROA 0.8%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — VALLEY NATIONAL BANCORP significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.

Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.

In summary, VALLEY NATIONAL BANCORP receives a Hold rating with a composite score of 52.9/100 (rank #1537 of 7,333). Our quantitative framework assigns a No Moat (26/100, trend: stable), High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 50/100.

Our analysis supports a neutral stance on VALLEY NATIONAL BANCORP. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.