Western Alliance Bancorporation WAL can be a solid bet now, backed by its organic growth strategies, that have placed it well for the future. Further, improving earnings performance and a strong capital and liquidity profile will support its profitability.
Further, analysts seem to be optimistic about the company’s prospects as the stock is witnessing upward estimate revisions. Over the past 30 days, the Zacks Consensus Estimate for the current year has risen 2% to $3.03. Backed by these upward estimate revisions, the company currently carries a Zacks Rank #2 (Buy).
Also, its shares have rallied 32.3% over the past year, outperforming the industry’s gain of 28.6%.
Why the Stock is an Attractive Choice?
Earnings Strength: Western Alliance has recorded an earnings growth rate of 19.3% over the last three to five years compared with the industry average of 14.4%. Continuing with the earnings momentum, the earnings growth rate for the current year is expected to be 18.4%.
Further, the company’s long-term (three to five years) estimated earnings growth rate of 11.3% promises rewards for investors in the long run.
Revenue Growth: Organic growth remains strong at Western Alliance. Revenues witnessed a CAGR of 19.4% over the last five years (2012–2016). Further, the top line is expected to jump 19.3% in 2017 compared with industry average of 5.5%.
Superior Return on Equity: Western Alliance has a return on equity of 14.22% compared with the industry average of 9.89%. This indicates that the company reinvests more efficiently compared with its peers.
Stock Looks Undervalued: Western Alliance stock looks undervalued with respect to its Price-to-Earnings (P/E) and PEG ratios. It has a P/E ratio of 15.71 compared with the industry average of 16.64. Also, the company’s PEG ratio of 1.39 is below the industry average of 1.81.
Other Stocks to Consider
Some other stocks in the same space worth a look include Zions Bancorporation ZION, People's Utah Bancorp PUB and Preferred Bank PFBC.
The Zacks Consensus Estimate for Zions has been revised 8.9% upward for 2017 over the past 30 days. Its share price has risen more than 9.8% over the past three months. It currently boasts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Also sporting the Zacks Rank #1, People's Utah Bancorp’s earnings estimates for 2017 have risen 2.9% over the past 30 days. Further, over the past three months, shares of the company have gained 8.2%.
Preferred Bank, with a Zacks Rank #2, recorded an upward earnings estimate revision of 4.9% for the current year in the past 30 days. Also, its share price has seen a 1.4% rise over the last three months.
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Zions Bancorporation (ZION) : Free Stock Analysis Report
Western Alliance Bancorporation (WAL) : Free Stock Analysis Report
Preferred Bank (PFBC) : Free Stock Analysis Report
People's Utah Bancorp (PUB) : Free Stock Analysis Report
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