Western Alliance Bancorporation
Western Alliance Bancorporation Fundamental Analysis
Western Alliance Bancorporation (WAL) shows strong financial fundamentals with a PE ratio of 9.80, profit margin of 18.30%, and ROE of 13.33%. The company generates $5.4B in annual revenue with strong year-over-year growth of 17.80%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 63.8/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze WAL's fundamental strength across five key dimensions:
Efficiency Score
WeakWAL struggles to generate sufficient returns from assets.
Valuation Score
ExcellentWAL trades at attractive valuation levels.
Growth Score
ModerateWAL shows steady but slowing expansion.
Financial Health Score
ModerateWAL shows balanced financial health with some risks.
Profitability Score
ModerateWAL maintains healthy but balanced margins.
Key Financial Metrics
Is WAL Expensive or Cheap?
P/E Ratio
WAL trades at 9.80 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, WAL's PEG of 1.24 indicates fair valuation.
Price to Book
The market values Western Alliance Bancorporation at 1.24 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 5.06 times EBITDA. This is generally considered low.
How Well Does WAL Make Money?
Net Profit Margin
For every $100 in sales, Western Alliance Bancorporation keeps $18.30 as profit after all expenses.
Operating Margin
Core operations generate 22.80 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $13.33 in profit for every $100 of shareholder equity.
ROA
Western Alliance Bancorporation generates $1.04 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Western Alliance Bancorporation generates limited operating cash flow of $354.63M, signaling weaker underlying cash strength.
Free Cash Flow
Western Alliance Bancorporation produces free cash flow of $354.63M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $3.22 in free cash annually.
FCF Yield
WAL converts 3.61% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
9.80
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.24
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.24
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.82
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.87
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.56
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.13
vs 25 benchmark
ROA
Return on assets percentage
0.01
vs 25 benchmark
ROCE
Return on capital employed
0.02
vs 25 benchmark
How WAL Stacks Against Its Sector Peers
| Metric | WAL Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 9.80 | 18.73 | Better (Cheaper) |
| ROE | 13.33% | 847.00% | Weak |
| Net Margin | 18.30% | 2562.00% | Weak |
| Debt/Equity | 0.87 | 0.93 | Neutral |
| Current Ratio | 0.56 | 674.76 | Weak Liquidity |
| ROA | 1.04% | -21692.00% (disorted) | Weak |
WAL outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Western Alliance Bancorporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
273.67%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
49.17%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
-461.15%
Industry Style: Value, Dividend, Cyclical
Declining