Earnings and revenue soar
Walker & Dunlop, Inc.(NYSE:WD) stock has recently soared since the company reported earnings that handily beat consensus estimates, with year-to-date gain by the stock standing at more than 20% on February 10. But earnings beat in 4Q16 is only part of the story behind the excitement around the stock. Approval of a generous buyback budget and upbeat market projections are other reasons investors are jostling for a slice of Walker & Dunlop.
Walker & Dunlop reported EPS (earnings per share) of $1.16 in 4Q16, an increase from a year earlier EPS of $0.67 and above the consensus estimate of $0.74. Revenue of $178.4 million also increased from a year earlier figure of $121.4 million, and topped the consensus estimate of $147.7 million.
Walker & Dunlop’s performance in 4Q16 aligned with its progress in 3Q16, where EPS of $0.96 also topped the estimate of $0.71 and revenue of $154.8 million exceeded the estimate of $129.4 million.
Walker & Dunlop returning $75 million to shareholders
The board of Walker & Dunlop has authorized a repurchase program that would see the company return $75.0 million to shareholders over a period of one year.
Walker & Dunlop’s market continues to expand. The company’s CEO, Willy Walker, recently noted that the US created more than one million households annually and growing number of those households prefer to live in rental housing. Freddie Mac also estimates that multifamily financing market will grow to $300 billion in 2017, up from $282 billion in 2016. The projections further call for the growth to continue until at least 2020.
But Walker & Dunlop will have to fend off tough competition from Vestin Realty Mortgage II, Inc. (NASDAQ:VRTB), CBRE Group Inc (NYSE:CBG), America First Multifamily Investors LP (NASDAQ:ATAX), Walter Investment Management Corp (NYSE:WAC) and others to take advantage of the anticipated growth.
As for now, the beating 4Q16 results and the buyback program have investors going for Walker & Dunlop stock.