While the S&P 500 is up 30.6% since April 2025, Walker & Dunlop (currently trading at $82.70 per share) has lagged behind, posting a return of 14.8%. This may have investors wondering how to approach the situation.
Is now the time to buy Walker & Dunlop, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it’s free for active Edge members.
Why Is Walker & Dunlop Not Exciting?
We don't have much confidence in Walker & Dunlop. Here are three reasons you should be careful with WD and a stock we'd rather own.
1. Declining Net Interest Income Reflects Weakness
Our experience and research show the market cares primarily about a bank’s net interest income growth as one-time fees are considered a lower-quality and non-recurring revenue source.
Walker & Dunlop’s net interest income has declined by 56.7% annually over the last five years, much worse than the broader banking industry. This shows that lending underperformed its other business lines.
2. EPS Trending Down
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Sadly for Walker & Dunlop, its EPS declined by 6.9% annually over the last five years while its revenue grew by 5.4%. This tells us the company became less profitable on a per-share basis as it expanded.
3. Growing TBVPS Reflects Strong Asset Base
For banks, tangible book value per share (TBVPS) is a crucial metric that measures the actual value of shareholders’ equity, stripping out goodwill and other intangible assets that may not be recoverable in a worst-case scenario.
Although Walker & Dunlop’s TBVPS declined at a 4.5% annual clip over the last five years. the good news is that its growth inflected positive over the past two years as TBVPS grew at an impressive 14.8% annual clip (from $16.66 to $21.94 per share).
Final Judgment
Walker & Dunlop isn’t a terrible business, but it doesn’t pass our quality test. With its shares lagging the market recently, the stock trades at 1.5× forward P/B (or $82.70 per share). This valuation tells us it’s a bit of a market darling with a lot of good news priced in - we think there are better opportunities elsewhere. Let us point you toward one of our top digital advertising picks.
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