East West Bancorp, Inc.
East West Bancorp, Inc. Fundamental Analysis
East West Bancorp, Inc. (EWBC) shows strong financial fundamentals with a PE ratio of 12.60, profit margin of 28.27%, and ROE of 15.77%. The company generates $4.7B in annual revenue with strong year-over-year growth of 13.56%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 76.8/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze EWBC's fundamental strength across five key dimensions:
Efficiency Score
WeakEWBC struggles to generate sufficient returns from assets.
Valuation Score
ModerateEWBC shows balanced valuation metrics.
Growth Score
ModerateEWBC shows steady but slowing expansion.
Financial Health Score
ModerateEWBC shows balanced financial health with some risks.
Profitability Score
ExcellentEWBC achieves industry-leading margins.
Key Financial Metrics
Is EWBC Expensive or Cheap?
P/E Ratio
EWBC trades at 12.60 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, EWBC's PEG of 2.45 indicates potential overvaluation.
Price to Book
The market values East West Bancorp, Inc. at 1.88 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 8.61 times EBITDA. This is generally considered low.
How Well Does EWBC Make Money?
Net Profit Margin
For every $100 in sales, East West Bancorp, Inc. keeps $28.27 as profit after all expenses.
Operating Margin
Core operations generate 37.44 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $15.77 in profit for every $100 of shareholder equity.
ROA
East West Bancorp, Inc. generates $1.65 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
East West Bancorp, Inc. generates strong operating cash flow of $1.28B, reflecting robust business health.
Free Cash Flow
East West Bancorp, Inc. generates strong free cash flow of $1.28B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $9.32 in free cash annually.
FCF Yield
EWBC converts 7.76% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
12.60
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
2.45
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.88
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.54
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.37
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.43
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.16
vs 25 benchmark
ROA
Return on assets percentage
0.02
vs 25 benchmark
ROCE
Return on capital employed
0.04
vs 25 benchmark
How EWBC Stacks Against Its Sector Peers
| Metric | EWBC Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 12.60 | 18.86 | Better (Cheaper) |
| ROE | 15.77% | 847.00% | Weak |
| Net Margin | 28.27% | 4202.00% | Weak |
| Debt/Equity | 0.37 | 0.91 | Strong (Low Leverage) |
| Current Ratio | 0.43 | 667.17 | Weak Liquidity |
| ROA | 1.65% | -21543.00% (disorted) | Weak |
EWBC outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews East West Bancorp, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
124.55%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
81.14%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
100.96%
Industry Style: Value, Dividend, Cyclical
High Growth