• If you are wondering whether Zions Bancorporation National Association is priced attractively right now, it helps to start with what the recent share performance and valuation checks are signaling.
• The stock last closed at US$63.26, with returns of 3.1% over 7 days, 8.6% over 30 days, 6.8% year to date, 40.3% over 1 year and 199.5% over 3 years, while the 5 year return stands at 26.7%.
• Recent headlines around US banks, including Zions Bancorporation National Association, have focused on issues such as credit quality, deposit trends and capital levels. These factors often influence how investors think about risk and pricing and help explain why the share price has been moving and why valuation has become a key talking point.
• On Simply Wall St's framework, Zions Bancorporation National Association records a valuation score of 5 out of 6. The next step is a closer look at how different valuation approaches line up and how a more holistic view can give you an even clearer sense of value by the end of this article.

Approach 1: Zions Bancorporation National Association Excess Returns Analysis

The Excess Returns model looks at how much profit a bank is expected to generate above the return that equity investors require, and capitalizes those excess profits into a per share value.

For Zions Bancorporation National Association, the model starts with a Book Value of US$49.16 per share and a Stable EPS of US$6.97 per share, based on weighted future Return on Equity estimates from 12 analysts. The implied Average Return on Equity is 12.38%. Against a Cost of Equity of US$3.93 per share, this leaves an Excess Return of US$3.04 per share, which is treated as value created on top of the required return.

The Stable Book Value is set at US$56.30 per share, sourced from weighted future Book Value estimates from 10 analysts. Combining this with the projected excess returns leads to an estimated intrinsic value of about US$141.54 per share. Compared with the recent share price of US$63.26, the Excess Returns model implies the stock is 55.3% undervalued.

Result: UNDERVALUED

Our Excess Returns analysis suggests Zions Bancorporation National Association is undervalued by 55.3%. Track this in your watchlist or portfolio, or discover 51 more high quality undervalued stocks.

Approach 2: Zions Bancorporation National Association Price vs Earnings

For a profitable bank, the P/E ratio is a straightforward way to gauge what the market is paying for each dollar of earnings. This makes it a useful cross check against the intrinsic value estimate you saw earlier. In general, higher growth expectations and lower perceived risk tend to support a higher P/E, while slower expected growth or higher risk are usually associated with a lower, more cautious multiple.

Zions Bancorporation National Association currently trades on a P/E of 9.82x. This sits below the Banks industry average P/E of 11.41x and also below the peer group average of 12.51x. Simply Wall St's Fair Ratio is 11.32x, which represents the P/E that would typically be expected after accounting for factors such as earnings growth profile, industry, profit margin, market cap and key risks.

The Fair Ratio is more tailored than a simple comparison with peers or the broad industry, because it adjusts for business specific characteristics rather than assuming all banks deserve the same multiple. Comparing the current 9.82x P/E with the Fair Ratio of 11.32x suggests the shares trade at a discount to what these fundamentals might justify.

Result: UNDERVALUED

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

Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St give you a clear story behind the numbers by linking your view of Zions Bancorporation National Association to a forecast and then to a fair value that you can compare with the current share price in real time when new news or earnings arrive.

On the Community page, you can see different Narratives side by side. For example, one investor assumes a fair value of US$76.48 with faster revenue growth and a 20.71% profit margin. Another sees fair value at US$67.90 with revenue growth of 3.83% and a 25.56% margin and a future P/E of 12.42x. This allows you to quickly decide which story, and which implied fair value, best fits your own view of the stock.

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.