Western Alliance Bancorporation (WAL.PA) stock analysis

P/E below its 5-year median

Western Alliance Bancorporation's P/E of 8.8 is below its own 5-year median of 9.2.

P/E below the industry

Western Alliance Bancorporation's P/E of 8.8 is below the Commercial Banks median of 12.6.

P/S above the industry

Western Alliance Bancorporation's price-to-sales of 37.74 is above the Commercial Banks median of 3.72.

P/B below the industry

Western Alliance Bancorporation's price-to-book of 1.13 is below the Commercial Banks median of 1.30.

Trading below fair value

The share price of $79.24 is below our fair value estimate of $93.73.

Margin of safety under 20%

The price is 15.5% below fair value, less than the 20% cushion we look for.

Revenue growing 10%+ a year

Revenue grew 45.5% a year over the last three fiscal years.

EPS growing under 10% a year

Diluted EPS grew -3.5% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 11.1% over the last twelve months, against a 5-year average of 13.8% a year.

Growing faster than the industry

Revenue grew 146% over the last twelve months; the Commercial Banks median is 11.4%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

Banks and insurers do not report gross profit.

Return on equity under 15%

Return on equity was 13.3% over the last twelve months and averaged 16.1% over five years; we look for 15% on both.

Return on assets over 1%

Return on assets was 1.1%; for a bank or insurer, 1% or more is considered good.

Return on equity above the industry

Western Alliance Bancorporation's return on equity of 13.3% is above the Commercial Banks median of 11.2%.

Earnings grew over 5 years

Net income grew 13.8% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 436% over the last twelve months, against a 5-year average of 1479%.

Net margin above the industry

Western Alliance Bancorporation's net margin of 436% is above the Commercial Banks median of 29.9%.

Thin capital

Equity is 7.8% of total assets; 8% or more is a comfortable cushion.

Loans funded by deposits

Loans equal 74.7% of deposits, so lending is funded by customer deposits.

Thin loan-loss reserve

The allowance for credit losses is 0.8% of loans; we look for at least 1%.

Efficient operations

Non-interest expense takes 57.5% of revenue; under 60% is efficient for a bank.

Deposits growing

Deposits grew 5.8% over the past year.

Modest borrowings

Borrowings other than deposits are 55.4% of equity.

Pays a dividend

Western Alliance Bancorporation paid dividends worth 2.1% of the share price over the last twelve months.

Yield below Treasuries

The 2.1% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.9% or more; Western Alliance Bancorporation yields 2.1%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 8 fiscal years.

Earnings cover

Needs dividends paid and net income.

Cash-flow cover

Needs dividends paid and free cash flow.