Is It Time to Consider Buying Webster Financial Corporation (NYSE:WBS)?

Webster Financial Corporation (NYSE:WBS), a company operating in the financial services industry based in the United States, has received a lot of attention due to a substantial price movement on the NYSE over the past few months, rising to $58.03 at one point, and falling to as low as $48.81. Some stock price movements can give investors a better opportunity to enter the stock and potentially buy at a lower price. One question that needs to be answered is whether Webster Financial’s current price of $51.66 reflects the true value of the mid-cap company? Or is it currently undervalued, giving us an opportunity to buy? Let’s take a look at Webster Financial’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Webster Financial

Is Webster Financial still cheap?

The stock appears to be fairly well valued at the moment according to my valuation model. It is trading about 18% below my intrinsic value, which means that if you buy Webster Financial today, you will be paying a fair price. And if you believe the stock is really worth $62.9, then there is not much room for the stock price to rise beyond its current price. So, is there another chance to buy low in the future? Given that Webster Financial stock is quite volatile (i.e. its price movements are magnified relative to the rest of the market), this could mean that the price can fall, giving us an opportunity to buy later. This is based on its high beta, which is a good indicator of the volatility of the stock price.

What kind of growth will Webster Financial generate?

Future outlook is an important aspect when considering a stock, especially if you are an investor looking for growth in your portfolio. While value investors argue that it is the intrinsic value relative to the price that matters most, a more compelling investment thesis would be high growth potential at a cheap price. With earnings expected to grow 18% over the next two years, the outlook is positive for Webster Financial. It appears that higher cash flows are on the horizon for the stock, which should translate into a higher stock valuation.

What this means for you:

Are you a shareholder? WBS’s optimistic growth seems to have been factored into the current stock price, which is trading around its fair value. However, there are also other important factors that we haven’t considered today, such as the company’s financial strength. Have these factors changed since you last looked at the stock? Will you have the confidence to invest in the company if the price falls below its fair value?

Are you a potential investor? If you’ve been following WBS, now may not be the most advantageous time to buy, given that the stock is trading around its fair value. However, the company’s positive outlook is encouraging, meaning it’s worth looking more closely at other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what really matters – the fundamentals – before making a decision on Webster Financial. You can find everything you need to know about Webster Financial in the latest infographic research report. If you are no longer interested in Webster Financial, you can use our free platform to see my list of over 50 other stocks with high growth potential.

Our goal is to provide you with long-term, focused research analysis based on fundamental data. Please note that our analysis may not factor in the latest price-sensitive company announcements or qualitative information.

If you spot an error that needs to be corrected, please contact the editor at [email protected]. This Simply Wall St article is general in nature. It is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. Simply Wall St has no position in any stock mentioned. Thank you for reading.