Columbia Financial (CLBK) Valuation Check After Recent Share Price Momentum

Columbia Financial stock overview

Columbia Financial (CLBK) has drawn fresh attention after a recent move in its share price, with returns over the past month and past 3 months standing out against its longer term performance profile.

See our latest analysis for Columbia Financial.

With the share price at US$18.44 and a 30 day share price return of 15.9% alongside a 90 day gain of 17.3%, recent momentum contrasts with a 3 year total shareholder return of 12.19% decline. This may hint at shifting expectations around growth and risk.

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With the stock near US$18.44 and recent returns outpacing its 3 year decline, the key question is whether Columbia Financial still trades below its fundamentals or if the market is already pricing in further growth.

Price-to-Earnings of 37x: Is it justified?

At a last close of $18.44, Columbia Financial trades on a P/E of 37x, which screens as expensive relative to both its peers and the wider US Banks industry.

The P/E ratio compares the current share price to earnings per share, so a higher multiple usually means investors are paying more today for each dollar of current earnings. For a bank like Columbia Financial, that kind of premium often reflects expectations for stronger profit growth or superior business quality compared with other lenders.

Here, the market is attaching a much richer valuation to CLBK than to the average US bank, despite CLBK having a low 4.5% return on equity and a value score of 0. That combination suggests investors are paying up today for expected earnings and revenue growth, rather than for currently high profitability. Compared with an estimated fair P/E of 24.8x, the current 37x multiple also sits well above the level that regression based analysis suggests the market could move toward if sentiment cools.

That premium stands out even more next to the numbers: management trades at 37x earnings versus a peer average of 16.9x and a US Banks industry average of 11.9x. This places CLBK at more than triple the sector level on this metric.

Explore the SWS fair ratio for Columbia Financial

Result: Price-to-Earnings of 37x (OVERVALUED)

However, the rich 37x P/E, alongside a 12.19% 3-year total return decline and a share price above the US$18 analyst target, could challenge the rebound story.

Find out about the key risks to this Columbia Financial narrative.

Next Steps

If this feels like a mixed picture, now is the moment to move fast and test the numbers yourself, starting with 2 key rewards.

Looking for more investment ideas?

If Columbia Financial has piqued your interest, do not stop here, the market is full of other ideas that could fit your goals even better.

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.

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