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Relative valuation derived from Financials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 56.9GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
9.9%
Sector: 8.5%
Dividend Analysis audit
INCOME
2.71%
Trailing Yield
$2.71
Per $100 Invested
Solid dividend yield for income-focused strategies.
Est. Payout Ratio
33%SAFE
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, WEBSTER FINANCIAL CORP (WBS) receives a "Buy" rating with a composite score of 56.7/100, ranked #53 out of 4446 stocks. Key factor scores: Quality 57/100, Value 75/100, Momentum 60/100. This is quantitative analysis only — not investment advice.
WEBSTER FINANCIAL CORP (WBS) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does WEBSTER FINANCIAL CORP Do?
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. WEBSTER FINANCIAL CORP (WBS) is classified as a large-cap stock in the Financials sector, specifically within the Banking industry. The company is led by CEO John R. Ciulla and employs approximately 3,240 people, headquartered in Waterbury, Connecticut. With a market capitalization of $11.3B, WBS is one of the prominent companies in the Financials sector.
As of April 2026, WEBSTER FINANCIAL CORP receives a Buy rating with a composite score of 56.7/100 and 4 out of 5 stars from the Blank Capital Research quantitative model.WBS ranks #53 out of 4,446 stocks in our coverage universe. Within the Financials sector, WEBSTER FINANCIAL CORP ranks #31 of 891 stocks, placing it in the top 10% of its Financials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
WBS Stock Price and 52-Week Range
WEBSTER FINANCIAL CORP (WBS) currently trades at $71.78. The stock gained $0.09 (0.1%) in the most recent trading session. The 52-week high for WBS is $74.00, which means the stock is currently trading -3.0% from its annual peak. The 52-week low is $39.43, putting the stock 82.0% above its annual trough. Recent trading volume was 1.9M shares, reflecting moderate market activity.
Is WBS Overvalued or Undervalued? — Valuation Analysis
WEBSTER FINANCIAL CORP (WBS) carries a value factor score of 75/100 in the Blank Capital model, suggesting the stock trades at a meaningful discount to its fundamental earning power. The trailing price-to-earnings ratio is 12.29x, compared to the Financials sector average of 14.88x — a discount of 17%. The price-to-book ratio stands at 1.22x, versus the sector average of 1.22x. The price-to-sales ratio is 5.22x, compared to 0.90x for the average Financials stock. On an enterprise value basis, WBS trades at 8.74x EV/EBITDA, versus 3.26x for the sector.
Based on these multiples, WEBSTER FINANCIAL CORP appears attractively valued relative to both its sector peers and the broader market. Value-oriented investors may find the current entry point compelling, particularly if the company's fundamental quality metrics also score well.
WEBSTER FINANCIAL CORP Profitability — ROE, Margins, and Quality Score
WEBSTER FINANCIAL CORP (WBS) earns a quality factor score of 57/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 9.9%, compared to the Financials sector average of 8.5%, which is below typical expectations for high-quality companies. Return on assets (ROA) comes in at 1.1% versus the sector average of 1.2%.
On a margin basis, WEBSTER FINANCIAL CORP reports gross margins of 0.0%. The operating margin is 160.8% (sector: 21.8%). Net profit margin stands at 105.0%, versus 17.7% for the average Financials stock. Revenue growth is running at 1084.7% on a trailing basis, compared to 9.4% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
WBS Debt, Balance Sheet, and Financial Health
WEBSTER FINANCIAL CORP has a debt-to-equity ratio of 8.0%, compared to the Financials sector average of 121.0%. The low leverage indicates a conservative balance sheet with significant financial flexibility. The current ratio is 1.13x, suggesting adequate working capital coverage. Total debt on the balance sheet is $739M. Cash and equivalents stand at $499M.
WBS has a beta of 1.26, meaning it is more volatile than the broader market — a $10,000 investment in WBS would be expected to move 26.1% more than the S&P 500 on any given day. The stability factor score for WEBSTER FINANCIAL CORP is 69/100, reflecting average volatility within the normal range for its sector.
WEBSTER FINANCIAL CORP Revenue and Earnings History — Quarterly Trend
In TTM 2026, WEBSTER FINANCIAL CORP reported revenue of $2.21B and earnings per share (EPS) of $5.91. Net income for the quarter was $940M. Gross margin was 0.0%. Operating income came in at $1.41B.
In FY 2025, WEBSTER FINANCIAL CORP reported revenue of $2.90B and earnings per share (EPS) of $5.91. Net income for the quarter was $1.00B. Revenue grew 11.9% year-over-year compared to FY 2024. Operating income came in at $1.47B.
In Q3 2025, WEBSTER FINANCIAL CORP reported revenue of $733M and earnings per share (EPS) of $1.55. Net income for the quarter was $261M. Revenue grew 1099.5% year-over-year compared to Q3 2024. Operating income came in at $376M.
In Q2 2025, WEBSTER FINANCIAL CORP reported revenue of $716M and earnings per share (EPS) of $1.52. Net income for the quarter was $259M. Revenue grew 1057.7% year-over-year compared to Q2 2024. Operating income came in at $370M.
Over the past 8 quarters, WEBSTER FINANCIAL CORP has demonstrated a growth trajectory, with revenue expanding from $62M to $2.21B. Investors analyzing WBS stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
WBS Dividend Yield and Income Analysis
WEBSTER FINANCIAL CORP (WBS) currently pays a dividend yield of 2.7%. At this yield, a $10,000 investment in WBS stock would generate approximately $$271.00 in annual dividend income. This compares to the Financials sector average dividend yield of 2.5%, meaning WBS offers above-average income for its sector. With a net margin of 105.0%, the dividend appears well-covered by earnings, suggesting sustainable payouts going forward.
WBS Momentum and Technical Analysis Profile
WEBSTER FINANCIAL CORP (WBS) has a momentum factor score of 60/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 20/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 45/100 reflects moderate short selling activity.
WBS vs Competitors — Financials Sector Ranking and Peer Comparison
Comparing WBS against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full WBS vs S&P 500 (SPY) comparison to assess how WEBSTER FINANCIAL CORP stacks up against the broader market across all factor dimensions.
WBS Next Earnings Date
No upcoming earnings date has been announced for WEBSTER FINANCIAL CORP (WBS) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy WBS? — Investment Thesis Summary
The bull case for WEBSTER FINANCIAL CORP rests on several quantitative strengths. The value score of 75/100 suggests attractive pricing relative to fundamentals. Price momentum is positive at 60/100, suggesting the trend favors buyers. Low volatility (stability score 69/100) reduces downside risk.
In summary, WEBSTER FINANCIAL CORP (WBS) earns a Buy rating with a composite score of 56.7/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on WBS stock.
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Institutional Research Dossier
WEBSTER FINANCIAL CORP (WBS) Deep Dive Analysis
Published on March 24, 2026
Action RatingBuy
Sections
Executive Summary
We maintain our Hold rating on Webster Financial Corporation (WBS). While the company exhibits attractive valuation metrics relative to its peers, particularly in terms of P/E and EV/EBITDA, and demonstrates strong profitability with high net and operating margins, concerns regarding its capital allocation strategy and the sustainability of its recent revenue growth temper our enthusiasm. The company's relatively low Investment score in our quant model suggests potential inefficiencies in deploying capital for future growth, warranting a cautious approach.
The primary takeaway is that WBS presents a mixed picture. Its current profitability and valuation are appealing, but investors should closely monitor the company's ability to maintain its growth trajectory and improve its capital allocation efficiency. The high debt-to-equity ratio also warrants careful consideration, as it could limit the company's financial flexibility in a rising interest rate environment.
Business Strategy & Overview
Webster Financial Corporation operates as a regional bank, providing a diversified suite of financial services through its Commercial Banking, HSA Bank, and Retail Banking segments. The Commercial Banking segment focuses on lending, deposit services, and wealth management for businesses and high-net-worth individuals. HSA Bank offers health savings accounts and related services, capitalizing on the growing demand for consumer-directed healthcare solutions. The Retail Banking segment provides traditional banking services to individual consumers, including mortgages, loans, and credit cards. The company's strategy involves leveraging its branch network and digital channels to serve its customer base across these segments.
Webster's strategic positioning is centered on building strong customer relationships and providing tailored financial solutions. The company aims to differentiate itself through its expertise in specific niches, such as healthcare banking through HSA Bank, and its commitment to community involvement. This approach allows Webster to compete effectively against larger national banks in its target markets. The company also emphasizes technological innovation to enhance its digital banking capabilities and improve customer experience.
A key aspect of Webster's business model is its focus on cross-selling financial products and services across its different segments. By offering a comprehensive range of solutions, the company aims to increase customer loyalty and generate higher revenue per customer. This strategy requires effective coordination and collaboration among the different business units. The company also actively manages its balance sheet to optimize its net interest margin and capital ratios.
The banking industry is highly competitive and subject to significant regulatory oversight. Webster faces competition from other regional and national banks, as well as non-bank financial institutions. The company must comply with various regulations related to capital adequacy, lending practices, and consumer protection. Changes in interest rates, economic conditions, and regulatory requirements can significantly impact Webster's profitability and growth prospects. The company's recent merger activity and integration efforts are also crucial to its future success.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
1084.7%
Sector: 9.4%
+11464% VS SCTR
Economic Moat Analysis
Webster Financial's economic moat is likely Narrow. While the company possesses some elements of a moat, they are not strong enough to warrant a Wide moat designation. The primary source of its competitive advantage stems from its established regional presence and customer relationships, particularly in the New England area. This local market knowledge and brand recognition create a degree of customer loyalty and switching costs.
The HSA Bank segment also contributes to the company's moat. Health savings accounts are characterized by some level of customer inertia, as individuals tend to maintain their accounts over time. This creates a sticky customer base and provides a recurring revenue stream for Webster. Furthermore, the company's relationships with insurance carriers and consultants provide a distribution advantage in the HSA market.
However, the banking industry is inherently competitive, and Webster faces significant competition from larger national banks and other regional players. The commoditized nature of many banking products and services limits the company's ability to differentiate itself solely on product features. While Webster's focus on customer service and community involvement can create a competitive edge, these factors are not easily scalable or defensible.
Furthermore, the increasing prevalence of online banking and fintech companies poses a threat to Webster's traditional business model. These digital competitors can offer lower-cost services and reach a wider customer base, potentially eroding Webster's market share. The company must continue to invest in technology and innovation to remain competitive in the evolving financial landscape. The regulatory environment also plays a crucial role in shaping the competitive dynamics of the banking industry. Changes in regulations can create both opportunities and challenges for Webster.
The company's relatively small size compared to its national competitors limits its ability to achieve significant economies of scale. This can put Webster at a disadvantage in terms of pricing and cost structure. While the recent merger activity may help to improve its scale and efficiency, it also introduces integration risks and challenges. Overall, Webster's moat is supported by its regional presence and HSA Bank segment, but it is not wide enough to provide a significant and sustainable competitive advantage.
Financial Health & Profitability
Webster Financial's financial health presents a mixed picture. The company has demonstrated strong revenue growth in recent periods, with a reported revenue increase of 1,084.7% compared to the sector average of 9.3%. This growth is likely attributable to recent acquisitions and merger activity. However, it is crucial to assess the sustainability of this growth and the underlying drivers behind it.
The company's profitability metrics are also impressive, with a net margin of 105.0% and an operating margin of 160.8%, significantly higher than the sector averages of 17.8% and 22.0%, respectively. These high margins suggest efficient operations and effective cost management. However, it is important to examine the components of these margins and identify any one-time gains or accounting adjustments that may be inflating the figures. The quarterly financial history reveals significant fluctuations in operating margin, indicating potential volatility in earnings.
Webster's balance sheet exhibits a relatively high debt-to-equity ratio of 8.00, compared to the sector average of 1.15. This high leverage could increase the company's financial risk, particularly in a rising interest rate environment. The company's ability to service its debt obligations and maintain adequate capital ratios should be closely monitored. The current ratio of 1.13 indicates sufficient liquidity to meet short-term obligations.
The company's return on equity (ROE) of 9.9% is slightly above the sector average of 8.5%, indicating efficient use of shareholder equity. However, it is important to compare Webster's ROE to its historical performance and to its peers to assess its relative attractiveness. The company's free cash flow generation has been inconsistent, with a significant increase in FY2024 followed by a decrease in the latest TTM period. This volatility in free cash flow could impact the company's ability to invest in future growth and return capital to shareholders.
Analyzing the quarterly financial history reveals a significant increase in revenue and net income in FY2025 compared to previous years. This growth is likely due to the merger with Sterling Bancorp. However, it is important to assess the integration of Sterling and the realization of synergies. The company's ability to maintain its profitability and growth trajectory will depend on its successful execution of its integration plan.
Valuation Assessment
Webster Financial's valuation appears attractive based on several key metrics. The company's P/E ratio of 11.5x is significantly lower than the sector average of 15.5x, suggesting that the stock may be undervalued relative to its earnings. Similarly, the EV/EBITDA ratio of 2.0x is also lower than the sector average of 3.5x, further supporting the notion that the company is undervalued based on its enterprise value and earnings before interest, taxes, depreciation, and amortization.
However, it is important to consider the company's growth prospects and risk profile when assessing its valuation. While the company has demonstrated strong revenue growth in recent periods, the sustainability of this growth is uncertain. The company's high debt-to-equity ratio also adds to its financial risk, which could justify a lower valuation multiple. Furthermore, the company's relatively low Investment score in our quant model suggests potential inefficiencies in capital allocation, which could also weigh on its valuation.
A discounted cash flow (DCF) analysis would provide a more comprehensive assessment of the company's intrinsic value. However, without detailed projections of future cash flows, it is difficult to determine the fair value of the stock with certainty. The company's historical free cash flow generation has been inconsistent, making it challenging to forecast future cash flows accurately.
Compared to its historical valuation, Webster's current P/E ratio is within its historical range. However, the company's recent merger activity and integration efforts could impact its future earnings and cash flows, making historical comparisons less relevant. It is important to monitor the company's progress in integrating Sterling Bancorp and realizing synergies to assess its long-term valuation potential.
Overall, Webster's valuation appears attractive based on its P/E and EV/EBITDA ratios. However, investors should carefully consider the company's growth prospects, risk profile, and capital allocation efficiency when making investment decisions. A more detailed valuation analysis, including a DCF analysis, would be necessary to determine the fair value of the stock with greater confidence.
Risk & Uncertainty
Several risks and uncertainties could impact Webster Financial's future performance. One of the most significant risks is the integration of Sterling Bancorp. The successful integration of the two companies is crucial to realizing the anticipated synergies and cost savings. Failure to effectively integrate the operations, systems, and cultures of the two companies could lead to disruptions, higher costs, and lower profitability.
Another key risk is the company's high debt-to-equity ratio. The company's leverage could increase its financial risk, particularly in a rising interest rate environment. Higher interest rates could increase the company's borrowing costs and reduce its profitability. The company's ability to service its debt obligations and maintain adequate capital ratios should be closely monitored.
The banking industry is subject to significant regulatory oversight. Changes in regulations could impact Webster's business model, capital requirements, and lending practices. Increased regulatory scrutiny could also lead to higher compliance costs. The company must comply with various regulations related to capital adequacy, lending practices, and consumer protection.
Competition from other regional and national banks, as well as non-bank financial institutions, poses a threat to Webster's market share and profitability. The increasing prevalence of online banking and fintech companies could erode Webster's traditional business model. The company must continue to invest in technology and innovation to remain competitive in the evolving financial landscape.
Economic conditions can also impact Webster's performance. A slowdown in economic growth or a recession could lead to higher loan losses and lower demand for banking services. Changes in interest rates, inflation, and unemployment can all affect the company's profitability and growth prospects.
Bulls Say / Bears Say
The Bull Case
BULL VIEWWebster's low P/E and EV/EBITDA ratios indicate it's significantly undervalued compared to peers, offering substantial upside potential as the market recognizes its true worth.
BULL VIEWThe successful integration of Sterling Bancorp will unlock significant synergies and cost savings, driving earnings growth and improving profitability beyond current expectations.
BULL VIEWWebster's strong presence in the growing HSA market provides a stable and recurring revenue stream, insulating it from broader economic downturns and supporting long-term growth.
The Bear Case
BEAR VIEWWebster's high debt-to-equity ratio exposes it to significant financial risk, especially if interest rates continue to rise, potentially hindering future growth and profitability.
BEAR VIEWThe integration of Sterling Bancorp could face unforeseen challenges, leading to higher-than-expected costs and a failure to realize the anticipated synergies, negatively impacting earnings.
BEAR VIEWDespite recent revenue growth, Webster's low Investment score suggests inefficient capital allocation, raising concerns about its ability to generate sustainable long-term growth and returns.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score WBS and 4,400+ other equities.
WEBSTER FINANCIAL CORP exhibits a 158% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
1.1%
Sector: 1.2%
Gross Margin
Pricing power and cost efficiency
0.0%
Sector: 0.0%
Operating Margin
Core business profitability
160.8%
Sector: 21.8%
Net Margin
Bottom-line profitability
105.0%
Sector: 17.7%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield2.48%
Yield Delta+9%
Income Projection audit
A $10,000 investment would generate approximately $271 annually in dividends at the current trailing rate.
