What Happened?
Shares of commercial real estate finance company Walker & Dunlop (NYSE: WD) fell 19.3% in the afternoon session after the company reported disappointing fourth-quarter 2025 financial results, missing Wall Street's expectations for both revenue and earnings per share.
The commercial real estate finance company reported adjusted earnings per share (EPS) of $0.28, which fell a staggering 80.8% short of the $1.46 consensus estimate. This was also a significant drop from the $1.34 per share earned in the same quarter of the previous year. Revenue was another weak spot, coming in at $340 million, a slight miss against analyst expectations of $343.5 million and remaining flat year over year. The steep decline in profitability highlighted a challenging quarter for the company, leading to negative investor sentiment.
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What Is The Market Telling Us
Walker & Dunlop’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. But moves this big are rare even for Walker & Dunlop and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 6.7% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
Walker & Dunlop is down 19.1% since the beginning of the year, and at $47.52 per share, it is trading 46% below its 52-week high of $87.97 from March 2025. Investors who bought $1,000 worth of Walker & Dunlop’s shares 5 years ago would now be looking at an investment worth $476.82.
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