Value
7.4/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 8.5 |
| P/S | 7.3 |
| Fwd P/E | 9.2 |
| PEG | 9.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 10.3x
- ▸PEG: 0.67
- ▸Attractively valued
WBS · Why this verdict
Why Webster Financial (WBS) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Webster Financial has beaten earnings estimates in all 4 of the last 4 quarters with a consistent beat margin averaging 3.8%, trades at a forward P/E of 10.2x with strong margin quality, but sits at the top of its 52-week range with negative asymmetry and limited near-term upside at current prices.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Webster Financial has beaten EPS consensus estimates in all 4 of the last 4 quarters, with actual EPS ranging from $1.52 to $1.59 against consensus estimates near $1.52, demonstrating consistent, predictable earnings delivery that supports the investment case. Earnings | Earnings beat streak extends to 6 consecutive quarters and average quarterly EPS surprise remains above 2%. | →Stable |
| CounterWebster's perfect beat streak over 4 quarters shows very small absolute surprises of 1-8%; this tight delivery may reflect conservative guidance management and could be interrupted by any credit quality deterioration. | ||
Webster's net margins of 37% rank best in class among regional bank peers, paired with a strong Piotroski F-Score of 8 out of 9, reflecting a fundamentally sound institution with above-average earnings quality. Quality breakdown | Net margin remains above 30% on a trailing 12-month basis and the Piotroski F-Score stays at or above 7 out of 9 over the next 12 months. | →Stable |
| CounterBest-in-class margins at a regional bank may compress as the interest rate environment shifts; banks that outperform in rising rate environments often give back the margin expansion when rates stabilize or decline. | ||
With the stock sitting 0.5% below its 52-week high and an asymmetry ratio of -2.62, the stock trades above analyst price targets with no near-term price upside priced in; the reward-to-risk ratio is -0.71, making new position entry unattractive at current levels. Targets | A pullback to below $65 restores a positive reward-to-risk ratio above 1.5, creating a better entry opportunity within 12 months. | →Stable |
| CounterStocks with strong fundamental momentum at 52-week highs often continue to new highs through analyst target upgrades; the negative asymmetry may resolve upward rather than through a price pullback. | ||
Webster carries 2 medium-severity concentration risks identified in its annual report risk disclosures, indicating documented areas where portfolio concentration could amplify losses if a specific sector or geography experiences stress. Risk breakdown | No disclosed credit concentration losses exceeding 0.5% of total assets are reported over the next 4 quarters. | →Stable |
| CounterMedium-severity concentration flags are standard disclosures at mid-size regional banks and reflect normal risk management documentation rather than imminent credit deterioration. | ||
Webster Financial has beaten EPS consensus estimates in all 4 of the last 4 quarters, with actual EPS ranging from $1.52 to $1.59 against consensus estimates near $1.52, demonstrating consistent, predictable earnings delivery that supports the investment case.
→StableEarnings
- Expectation
- Earnings beat streak extends to 6 consecutive quarters and average quarterly EPS surprise remains above 2%.
CounterWebster's perfect beat streak over 4 quarters shows very small absolute surprises of 1-8%; this tight delivery may reflect conservative guidance management and could be interrupted by any credit quality deterioration.
Webster's net margins of 37% rank best in class among regional bank peers, paired with a strong Piotroski F-Score of 8 out of 9, reflecting a fundamentally sound institution with above-average earnings quality.
→StableQuality breakdown
- Expectation
- Net margin remains above 30% on a trailing 12-month basis and the Piotroski F-Score stays at or above 7 out of 9 over the next 12 months.
CounterBest-in-class margins at a regional bank may compress as the interest rate environment shifts; banks that outperform in rising rate environments often give back the margin expansion when rates stabilize or decline.
With the stock sitting 0.5% below its 52-week high and an asymmetry ratio of -2.62, the stock trades above analyst price targets with no near-term price upside priced in; the reward-to-risk ratio is -0.71, making new position entry unattractive at current levels.
→StableTargets
- Expectation
- A pullback to below $65 restores a positive reward-to-risk ratio above 1.5, creating a better entry opportunity within 12 months.
CounterStocks with strong fundamental momentum at 52-week highs often continue to new highs through analyst target upgrades; the negative asymmetry may resolve upward rather than through a price pullback.
Webster carries 2 medium-severity concentration risks identified in its annual report risk disclosures, indicating documented areas where portfolio concentration could amplify losses if a specific sector or geography experiences stress.
→StableRisk breakdown
- Expectation
- No disclosed credit concentration losses exceeding 0.5% of total assets are reported over the next 4 quarters.
CounterMedium-severity concentration flags are standard disclosures at mid-size regional banks and reflect normal risk management documentation rather than imminent credit deterioration.
Per-dimension breakdown
Quality
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.6 |
| ROA | 0.8 |
| Gross margin | 0.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Moat | 4.8 |
| Piotroski F | 8.9 |
- ▸Strong margins: 37%
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
4.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.7 |
| EPS growth | 5.1 |
Momentum
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 4.7 |
| erm sentiment | 4.5 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $573,376 (0.005% of mkt cap)
Peer rank
5.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.7 |
| quality rank | 6.8 |
| growth rank | 3.5 |
- ▸Best-in-class margins
Technical
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.6 |
| support resistance | 0.9 |
| 52w position | 9.9 |
Risk (lower is worse)
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| volatility | 9.8 |
| put call | 8.5 |
| implied vol | 6.0 |
| max pain risk | 3.0 |
| beta | 7.0 |
- ▸Above max pain $35
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.4 |
| dividend safety | 5.2 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 212.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:5.0>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:28d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-2.8=NEGATIVE
Warning (1)
- MOMENTUM:5.0<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
-2.82
Upside
-14.7%
Downside
5.2%
Sizing output
AVOID
SetupBREAKOUT — Golden cross, above all MAs, RSI 70, MACD bullish
EdgeCATALYST — Earnings in 28d with 4/4 beat streak
SuitabilityMODERATE — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:5.0>=4.5. Top dim: Value at 7.4; weakest: Technical at 4.1. No conviction either direction.
The strongest dimensions are Value at 7.4, Risk (lower is worse) at 7.4, and Catalyst at 5.9; the weakest are Technical at 4.1, Sentiment at 4.8, and Growth at 4.9. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -2.82 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Webster Financial has beaten EPS consensus estimates in all 4 of the last 4 quarters, with actual EPS ranging from $1.52 to $1.59 against consensus estimates near $1.52, demonstrating consistent, predictable earnings delivery that supports the investment case.
Trip ifEPS falls below $1.40 in at least 1 of the next 4 quarters, breaking the consistent delivery range.
- P2Webster's net margins of 37% rank best in class among regional bank peers, paired with a strong Piotroski F-Score of 8 out of 9, reflecting a fundamentally sound institution with above-average earnings quality.
Trip ifNet margin falls below 28%, indicating more than a 9-point compression from the current 37%.
- P3With the stock sitting 0.5% below its 52-week high and an asymmetry ratio of -2.62, the stock trades above analyst price targets with no near-term price upside priced in; the reward-to-risk ratio is -0.71, making new position entry unattractive at current levels.
Trip ifPrice rises above $85 without analyst target upgrades above $90, leaving the stock more than 10% above fair value.
- P4Webster carries 2 medium-severity concentration risks identified in its annual report risk disclosures, indicating documented areas where portfolio concentration could amplify losses if a specific sector or geography experiences stress.
Trip ifCredit charge-offs or provisioning increases by more than 50% year-over-year in any single quarter, indicating concentration risk has materialized.