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Shares of Walker & Dunlop Inc. (NYSE: WD) popped 15.1% as of 3:40 p.m. EDT Wednesday after the commercial real estate finance company announced strong first-quarter 2017 results.
Quarterly revenue climbed 68% year over year, to $158.5 million, driven by a 92% increase in total transaction volume with strength across all lending products and investment sales. Lending with Fannie Mae also rose 147% from the same year-ago period. Trending toward the bottom line, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 55% year over year, to $50.3 million. That translated to net income of $43.2 million, or $1.35 per diluted share, up 180% from $15.5 million, or $0.50 per share in last year's first quarter.
By comparison, analysts' consensus estimates had called for earnings of just $0.73 per share on revenue of $135.3 million.
IMAGE SOURCE: WALKER & DUNLOP.
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"2017 is off to an extremely strong start for Walker & Dunlop," stated company chairman and CEO Willy Walker. "We recruited and acquired many talented mortgage bankers and brokers over the past year, which helped produce record first quarter 2017 transaction volume, revenues, adjusted EBITDA, and earnings."
While Walker & Dunlop doesn't typically provide specific forward financial guidance, Mr. Walker did elaborate:
Our team continues to perform at a high level with a tremendous sense of teamwork. Our clients continue to ask us to do more. And our outlook is very strong as the economy expands, interest rates remain relatively low, and the demand for commercial real estate -- particularly rental housing -- continues forward.
In the end, this was a straightforward case of Walker & Dunlop exceeding expectations and leaving investors rightly excited for what's to come. So even with shares up nearly 70% so far in 2017 as of this writing, I won't be the least bit surprised if the stock continues to deliver market-beating returns from here.
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