Is Webster Financial Corp. overvalued or undervalued?

As of 17 October 2025, Webster Financial Corp. has moved from a fair to a very attractive valuation grade. The company appears to be undervalued, particularly given its P/E ratio of 12, which is lower than the peer average of approximately 12.32 for comparable institutions like Northwest Bancshares, Inc. and WSFS Financial Corp. Additionally, Webster's price-to-book value stands at 1.00, and its EV to EBITDA ratio is 8.41, both indicating potential for growth relative to its peers.
In terms of performance, Webster Financial Corp. has underperformed against the S&P 500 in the short term, with a year-to-date return of -1.72% compared to the S&P 500's 13.30%. However, over the longer term, the company has shown a solid 5-year return of 88.44%, which is close to the S&P 500's 91.29%. This suggests that while the stock may currently be undervalued, it has the potential for recovery and growth in the future.