While the S&P 500 is up 19.8% since May 2025, Webster Financial (currently trading at $56.68 per share) has lagged behind, posting a return of 14.5%. This might have investors contemplating their next move.

Is WBS a buy right now? Or is its underperformance reflective of its business quality?

Why Does WBS Stock Spark Debate?

Founded during the Great Depression in 1935 and evolving into a major Northeastern financial institution, Webster Financial (NYSE: WBS) is a bank holding company that provides commercial banking, consumer banking, and employee benefits solutions through its Webster Bank and HSA Bank division.

Two Positive Attributes:

1. Net Interest Income Skyrockets, Fueling Growth Opportunities

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.

Webster Financial’s net interest income has grown at a 22.6% annualized rate over the last five years, much better than the broader banking industry and faster than its total revenue. Its growth was driven by both an increase in its outstanding loans and net interest margin, which represents how much a bank earns in relation to its outstanding loan book.

One Reason to be Careful:

Projected Net Interest Income Growth Is Slim

Forecasted net interest income by Wall Street analysts signals a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect Webster Financial’s net interest income to rise by 4.4%.

Final Judgment

Webster Financial has huge potential even though it has some open questions. With its shares lagging the market recently, the stock trades at 1× forward P/B (or $56.68 per share). Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .

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