• Wondering if Zions Bancorporation National Association is offering good value at its current price, or if the easy money has already been made?
• The stock last closed at US$54.24, with a 7 day return of a 5.6% decline and a 30 day return of a 15.4% decline, set against a 1 year return of 19.3% and a 3 year return of 90.0%.
• Recent coverage has focused on how regional banks are being reassessed by investors, with Zions often cited in discussions about balance sheet strength and interest rate sensitivity. This context helps explain why the share price has seen both setbacks over the past month and stronger performance over the last few years.
• On our framework, Zions scores a valuation score of 6 out of 6. Next, we will walk through what that means across different valuation methods and introduce a deeper way to think about value at the end of the article.

Approach 1: Zions Bancorporation National Association Excess Returns Analysis

The Excess Returns model looks at how effectively a bank turns its equity base into earnings after covering the required return that shareholders expect. Instead of focusing on cash flows, it compares the return on equity to the cost of equity and projects how much value the bank might create on top of its book value over time.

For Zions Bancorporation National Association, the model uses a Book Value of $48.18 per share and a Stable EPS of $6.90 per share, based on weighted future Return on Equity estimates from 16 analysts. The Average Return on Equity used is 12.04%. Against a Cost of Equity of $4.11 per share, this produces an Excess Return of $2.79 per share, which is then applied to a Stable Book Value estimate of $57.27 per share, sourced from 13 analysts.

Putting these inputs together, the Excess Returns model points to an intrinsic value of about $131.54 per share. Compared with the recent share price of $54.24, this implies the stock is 58.8% undervalued on this framework.

Result: UNDERVALUED

Our Excess Returns analysis suggests Zions Bancorporation National Association is undervalued by 58.8%. Track this in your watchlist or portfolio, or discover 47 more high quality undervalued stocks.

Approach 2: Zions Bancorporation National Association Price vs Earnings

For a profitable bank like Zions Bancorporation National Association, the P/E ratio is a straightforward way to relate what you pay per share to the earnings the business is generating today. Investors usually accept a higher or lower P/E depending on what they expect for future earnings growth and how much risk they see in those earnings.

Zions currently trades on a P/E of 9.07x. That sits below both the broader Banks industry average P/E of 11.23x and a peer group average of 12.41x. On the surface, that suggests the market is putting a lower price on each dollar of Zions’ earnings compared with many banks in its space.

Simply Wall St’s Fair Ratio for Zions is 11.79x. This is a proprietary estimate of what the P/E might be, given factors such as the company’s earnings growth profile, industry, profit margins, market value and risk characteristics. Because it blends these company specific inputs instead of relying only on simple peer or industry comparisons, it can give a more tailored view of what a reasonable multiple could look like. With the current P/E of 9.07x sitting below the Fair Ratio of 11.79x, Zions appears undervalued on this P/E framework.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Zions Bancorporation National Association Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply your story about a company linked directly to your assumptions for future revenue, earnings, margins and the fair value you think those numbers support.

On Simply Wall St’s Community page, Narratives let you combine that story with a forecast and a fair value estimate, then easily compare it to today’s share price so you can judge for yourself whether Zions Bancorporation National Association looks attractively priced, fully priced or expensive on your numbers.

Because Narratives on the platform update when new information comes in, such as an earnings report or fresh analyst expectations, your fair value view can stay aligned with the latest data without you needing to rebuild your work from scratch each time.

For example, one Zions Narrative on the Community page currently anchors on a fair value of US$76.48 while another uses US$66.71, which shows how two investors can look at the same bank, weigh its opportunities and risks differently, and arrive at different yet clearly structured stories and fair values.

Do you think there's more to the story for Zions Bancorporation National Association? Head over to our Community to see what others are saying!

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.