Walker & Dunlop (WD)
We’re skeptical of Walker & Dunlop. Its revenue and earnings have underwhelmed, suggesting weak business fundamentals.― StockStory Analyst Team
1. News
2. Summary
Why We Think Walker & Dunlop Will Underperform
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.
- Loans are facing significant end-market challenges during this cycle as net interest income has declined by 43.8% annually over the last five years
- Earnings per share fell by 6.7% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- On the bright side, its market share is on track to rise over the next 12 months as its 111% projected net interest income growth implies demand will accelerate from its five-year trend
Walker & Dunlop lacks the business quality we seek. There are more profitable opportunities elsewhere.
Why There Are Better Opportunities Than Walker & Dunlop
Walker & Dunlop is trading at $64.38 per share, or 1.2x forward P/B. This multiple is cheaper than most banking peers, but we think this is justified.
Cheap stocks can look like a great deal at first glance, but they can be value traps. They often have less earnings power, meaning there is more reliance on a re-rating to generate good returns - an unlikely scenario for low-quality companies.
3. Walker & Dunlop (WD) Research Report: Q3 CY2025 Update
Commercial real estate finance company Walker & Dunlop (NYSE:WD) reported revenue ahead of Wall Streets expectations in Q3 CY2025, with sales up 15.5% year on year to $337.7 million. Its non-GAAP profit of $1.22 per share was 1.9% above analysts’ consensus estimates.
Walker & Dunlop (WD) Q3 CY2025 Highlights:
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.
Walker & Dunlop operates at the intersection of real estate and finance, with a particular focus on multifamily properties. The company originates loans through government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac, as well as through the Federal Housing Administration (FHA). Under the Fannie Mae Delegated Underwriting and Servicing program, Walker & Dunlop shares a portion of the risk on loans it originates, with its maximum loss typically capped at 20% of the loan amount.
Beyond loan origination, Walker & Dunlop maintains a substantial servicing portfolio, generating steady fee income by managing loans throughout their lifecycle. The company retains servicing rights on most loans it originates, providing ongoing revenue streams long after the initial transaction. These services include collecting payments, managing escrow accounts, conducting property inspections, and reporting to investors.
Walker & Dunlop has expanded its offerings to include property sales brokerage, helping owners sell multifamily assets while often providing financing to the purchasers. Its investment management arm, Walker & Dunlop Investment Partners, manages debt and equity investments in commercial real estate funds with billions in assets under management. The company has also established a significant presence in affordable housing through tax credit syndication, forming partnerships with developers and investors to create and preserve affordable housing units nationwide.
Technology has become increasingly important to Walker & Dunlop's strategy, with investments in data analytics to support its small-balance lending platform and enhance its appraisal services. A client working with Walker & Dunlop might engage the company to secure financing for a multifamily property acquisition, later use its property sales team when selling the asset, and potentially invest in one of its real estate funds.
4. Thrifts & Mortgage Finance
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.
5. Sales Growth
From lending activities to service fees, most banks build their revenue model around two income sources. Interest rate spreads between loans and deposits create the first stream, with the second coming from charges on everything from basic bank accounts to complex investment banking transactions. Thankfully, Walker & Dunlop’s 5.4% annualized revenue growth over the last five years was decent. Its growth was slightly above the average banking company and shows its offerings resonate with customers.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Walker & Dunlop’s annualized revenue growth of 7.8% over the last two years is above its five-year trend, suggesting its demand recently accelerated. 
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 reported year-on-year revenue growth of 15.5%, and its $337.7 million of revenue exceeded Wall Street’s estimates by 3.5%.
Net interest income made up -3.6% 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.
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.6. Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Sadly for Walker & Dunlop, its EPS declined by 6.7% 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.
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 growth of 14.3% was higher than its five-year trend. This acceleration made it one of the faster-growing banking companies in recent history.
In Q3, Walker & Dunlop reported adjusted EPS of $1.22, up from $1.19 in the same quarter last year. This print beat analysts’ estimates by 1.9%. Over the next 12 months, Wall Street expects Walker & Dunlop’s full-year EPS of $4.56 to grow 15.7%.
7. Tangible Book Value Per Share (TBVPS)
The balance sheet drives banking profitability since earnings flow from the spread between borrowing and lending rates. As such, valuations for these companies concentrate on capital strength and sustainable equity accumulation potential.
This explains why tangible book value per share (TBVPS) stands as the premier banking metric. TBVPS strips away questionable intangible assets, revealing concrete per-share net worth that investors can trust. 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 4.4% annual clip over the last five years. However, TBVPS growth has accelerated recently, growing by 13.7% annually over the last two years from $17.41 to $22.50 per share.
Over the next 12 months, Consensus estimates call for Walker & Dunlop’s TBVPS to grow by 9.4% to $24.61, decent growth rate.
8. Return on Equity
Return on equity, or ROE, quantifies bank profitability relative to shareholder equity - an essential capital source for these institutions. Over extended periods, superior ROE performance drives faster shareholder wealth compounding through reinvestment, share repurchases, and dividend growth.
Over the last five years, Walker & Dunlop has averaged an ROE of 11.1%, impressive for a company operating in a sector where the average shakes out around 7.5% and those putting up 15%+ are greatly admired. This is a bright spot for Walker & Dunlop.
9. Key Takeaways from Walker & Dunlop’s Q3 Results
We enjoyed seeing Walker & Dunlop beat analysts’ revenue expectations this quarter. On the other hand, its EPS slightly beat. Overall, this print had some key positives. The stock remained flat at $79.98 immediately following the results.
10. Is Now The Time To Buy Walker & Dunlop?
Updated: December 3, 2025 at 11:52 PM EST
Are you wondering whether to buy Walker & Dunlop or pass? We urge investors to not only consider the latest earnings results but also longer-term business quality and valuation as well.
Walker & Dunlop’s business quality ultimately falls short of our standards. First off, its revenue growth was uninspiring over the last five years, and analysts don’t see anything changing over the next 12 months. And 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 1.2x. Investors with a higher risk tolerance might like the company, but we don’t really see a big opportunity at the moment. We're fairly confident there are better stocks to buy right now.
Wall Street analysts have a consensus one-year price target of $92.33 on the company (compared to the current share price of $64.38).
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.