Waterstone Financial (WSBF) has wrapped up FY 2025 with fourth quarter revenue of US$37.7 million and basic EPS of US$0.44, while trailing 12 month figures show revenue of US$143.3 million and EPS of US$1.48. This sets a clear earnings season marker for investors. The company has seen quarterly revenue range from US$30.2 million to US$38.0 million over the past year, with basic EPS moving from US$0.17 in Q1 2025 to US$0.45 in Q3 2025, giving a fuller picture of how the business has been earning its way to the current trailing 12 month profile. With trailing net profit margins higher than a year ago, the results point to firmer profitability as investors weigh what that means for the story from here.

See our full analysis for Waterstone Financial.

With the headline numbers on the table, the next step is to see how this earnings profile lines up with the widely followed narratives around growth, quality and risk for Waterstone Financial, and where those stories might need to be reconsidered.

41% earnings growth against a weak 5 year record

• Trailing 12 month earnings grew 41.3% year over year, but the five year annualized earnings change is a 42.4% decline per year, so the recent recovery sits on top of a much softer longer history.
• What stands out for a bullish view is that this 41.3% earnings growth coincides with an 18.4% net profit margin, yet:
  • The 42.4% annual decline over five years gives cautious investors clear grounds to question how durable the recent 12 month improvement really is.
  • This mix of strong one year growth and weak five year performance means anyone leaning bullish has to be comfortable with a story that is heavily weighted to the most recent period.

Margins at 18.4% versus 13.8% last year

• Net profit margin on a trailing 12 month basis sits at 18.4%, compared with 13.8% a year earlier. This lines up with the increase in trailing net income from US$18.7 million to US$26.4 million, on revenue moving from US$135.6 million to US$143.3 million.
• Bulls might argue that an 18.4% margin supports a healthier core business, and the figures give them some backing, but also some friction points:
  • Quarterly net income excluding extra items stayed in a fairly tight band in FY 2025 at US$7.7 million to US$7.9 million from Q2 to Q4, which looks more like a steady level than a surge.
  • Trailing revenue at US$143.3 million is only modestly above the US$135.6 million level a year earlier, so the margin uplift relies more on profitability than on rapid top line expansion.

To see how these margin shifts fit into the broader story on growth, risks and valuation, have a look at the community narratives and see how other investors are interpreting the same numbers. Curious how numbers become stories that shape markets? Explore Community Narratives

P/E discount versus peers, but far above DCF fair value

• Waterstone Financial trades on a trailing P/E of 13.1x, which is below the US Diversified Financial industry average of 14.8x and the peer average of 20.3x. However, the current share price of US$18.44 sits well above the DCF fair value of US$4.03 cited in the analysis.
• Bears often focus on valuation gaps like this, and the figures here give that cautious stance specific support:
  • The large difference between the US$18.44 market price and the US$4.03 DCF fair value means investors who rely on discounted cash flow work will see limited room for error at today’s price.
  • An unstable dividend track record, combined with the 42.4% annual earnings decline over five years, adds more weight to the argument that the lower P/E multiple and recent 12 month earnings rebound do not automatically resolve longer term concerns.

If you want to see how cautious investors interpret this P/E discount versus DCF gap, take a look at the bear case breakdown for Waterstone Financial. 🐻 Waterstone Financial Bear Case

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Waterstone Financial's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

Waterstone Financial pairs a sharp 41.3% rebound in trailing earnings with a much weaker 42.4% annual earnings record over five years and an unstable dividend history.

If that mix of uneven long term earnings and dividend uncertainty gives you pause, check out these 1814 dividend stocks with yields > 3% to focus on income ideas with yields and consistency front and center.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.