Walker & Dunlop (WD)

Commercial real estate finance company Walker & Dunlop (NYSE:WD) missed Wall Street’s revenue expectations in Q4 CY2025, with sales flat year on year at $340 million. Its non-GAAP profit of $0.28 per share was 80.8% below analysts’ consensus estimates.

Company Overview

Originating as a small mortgage banking firm during the Great Depression in 1937, Walker & Dunlop (NYSE:WD) provides commercial real estate financing, property sales, appraisal, and investment management services with a focus on multifamily properties.

Thrifts & Mortgage Finance institutions operate by accepting deposits and extending loans primarily for residential mortgages, earning revenue through interest rate spreads (difference between lending rates and borrowing costs) and origination fees. The industry benefits from demographic tailwinds as millennials enter prime homebuying age, technological advancements streamlining the loan approval process, and potential interest rate stabilization improving affordability. However, significant headwinds include net interest margin compression during rate volatility, increased competition from fintech disruptors offering digital-first experiences, mounting regulatory compliance costs, and potential housing market corrections that could impact loan portfolios and default rates.

Walker & Dunlop competes with major financial institutions and specialized commercial real estate service providers including CBRE Group, Jones Lang LaSalle, Wells Fargo, PNC Real Estate, Berkadia Commercial Mortgage, and Marcus & Millichap. In the affordable housing and tax credit syndication space, competitors include Boston Financial Investment Management, Raymond James, and Enterprise Community Partners.

Two primary revenue streams drive bank earnings. While net interest income, which is earned by charging higher rates on loans than paid on deposits, forms the foundation, fee-based services across banking, credit, wealth management, and trading operations provide additional income. Unfortunately, Walker & Dunlop’s 2.6% annualized revenue growth over the last five years was sluggish. This fell short of our benchmarks and is a poor baseline for our analysis.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Walker & Dunlop’s annualized revenue growth of 8.2% over the last two years is above its five-year trend, which is encouraging. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Walker & Dunlop missed Wall Street’s estimates and reported a rather uninspiring 0.4% year-on-year revenue decline, generating $340 million of revenue.

Net interest income made up -4% of the company’s total revenue during the last five years, meaning Walker & Dunlop is well diversified and has a variety of income streams driving its overall growth. Nevertheless, net interest income is critical to analyze for banks because they’re considered a higher-quality, more recurring revenue source by investors.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for Walker & Dunlop, its EPS declined by 14.6% annually over the last five years while its revenue grew by 2.6%. This tells us the company became less profitable on a per-share basis as it expanded.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Walker & Dunlop, its two-year annual EPS declines of 2.3% show it’s still underperforming. These results were bad no matter how you slice the data.

In Q4, Walker & Dunlop reported adjusted EPS of $0.28, down from $1.34 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects Walker & Dunlop’s full-year EPS of $3.50 to grow 53%.

Banks operate as balance sheet businesses, with profits generated through borrowing and lending activities. Valuations reflect this reality, emphasizing balance sheet strength and long-term book value compounding ability.

Because of this, tangible book value per share (TBVPS) emerges as the critical performance benchmark. By excluding intangible assets with uncertain liquidation values, this metric captures real, liquid net worth per share. EPS can become murky due to acquisition impacts or accounting flexibility around loan provisions, and TBVPS resists financial engineering manipulation.

Walker & Dunlop’s TBVPS declined at a 6.8% annual clip over the last five years. However, TBVPS growth has accelerated recently, growing by 5.6% annually over the last two years from $19.47 to $21.70 per share.

Over the next 12 months, Consensus estimates call for Walker & Dunlop’s TBVPS to grow by 16.6% to $25.31, solid growth rate.

Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for banks. Over a long period, banks with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.

Over the last five years, Walker & Dunlop has averaged an ROE of 9.5%, uninspiring for a company operating in a sector where the average shakes out around 7.5%.

We struggled to find many positives in these results. Its EPS missed and its revenue fell slightly short of Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $58.91 immediately following the results.

Updated: February 27, 2026 at 12:35 AM EST

Before investing in or passing on Walker & Dunlop, we urge you to understand the company’s business quality (or lack thereof), valuation, and the latest quarterly results - in that order.

We see the value of companies driving economic growth, but in the case of Walker & Dunlop, we’re out. To begin with, its revenue growth was weak over the last five years. While its estimated net interest income growth for the next 12 months is great, the downside is its TBVPS has declined over the last five years. On top of that, its declining EPS over the last five years makes it a less attractive asset to the public markets.

Walker & Dunlop’s P/B ratio based on the next 12 months is 1x. This valuation tells us a lot of optimism is priced in - we think there are better opportunities elsewhere.

Wall Street analysts have a consensus one-year price target of $83.33 on the company (compared to the current share price of $47.80).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.