Western Alliance Bancorp (WAL, Financial) has experienced a notable fluctuation in its stock price recently, with a significant 34.16% increase over the past three months, despite a slight 3.62% decline in the past week. Currently, the market capitalization stands at $9.09 billion, with the stock priced at $82.59. According to GuruFocus's valuation metrics, the stock is now considered fairly valued with a GF Value of $77.75, a slight increase from the past GF Value of $74.75, which had indicated the stock was modestly undervalued.
Overview of Western Alliance Bancorp
Western Alliance Bancorp operates as a pivotal financial entity within the banking sector, primarily serving Nevada, Arizona, and California. The company's diverse portfolio includes commercial banking services, treasury management, and specialized financial services catering to niche markets. Additionally, it provides consumer banking services such as residential mortgage banking. This broad spectrum of services underpins its robust operational framework.
Assessing Profitability
Western Alliance Bancorp boasts a Profitability Rank of 7 out of 10, reflecting its strong position within the industry. The company's Return on Equity (ROE) is an impressive 12.25%, ranking better than 66.54% of 1,587 companies in the same sector. Similarly, its Return on Assets (ROA) stands at 1.00%, surpassing 58.64% of its peers. These metrics not only highlight the company's effective management but also its ability to generate profits over the past decade consistently.
Growth Trajectory
The company's Growth Rank is a perfect 10/10. Over the past three years, WAL has achieved a revenue growth rate per share of 17.30%, outperforming 81.46% of 1,532 companies. This trend is even more pronounced over a five-year period, with a growth rate of 20.60%, ranking better than 90.31% of 1,445 companies. Looking ahead, the estimated total revenue growth rate for the next three to five years is 20.65%, which continues to position WAL favorably against 90.25% of 441 companies. The EPS without NRI has also seen substantial growth, with a future estimate growth rate of 25.95%, significantly higher than 87.47% of its peers.
Significant Shareholders
Notable investors in Western Alliance Bancorp include Smead Value Fund (Trades, Portfolio), holding 1,135,780 shares, representing 1.03% of the company's shares. Following closely is Chuck Royce (Trades, Portfolio), with 371,478 shares, and HOTCHKIS & WILEY, holding 64,825 shares. These stakeholders underscore the confidence in WAL's financial health and growth prospects.
Competitive Landscape
Western Alliance Bancorp competes with several close market cap companies within the banking sector. First Horizon Corp (FHN, Financial) with a market cap of $8.26 billion, Commerce Bancshares Inc (CBSH, Financial) valued at $7.89 billion, and Webster Financial Corp (WBS, Financial) at $7.44 billion are key competitors. WAL's recent performance and growth trajectory provide a competitive edge in this group.
Conclusion
In conclusion, Western Alliance Bancorp's financial health and market position appear robust. The company's recent stock performance, coupled with its fair valuation and strong growth prospects, suggest a stable future. Investors should consider the implications of the current valuation in light of these factors, keeping an eye on the competitive dynamics within the banking industry.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
