Financial services giant Wells Fargo (NYSE: WFC) fell short of the markets revenue expectations in Q4 CY2025 as sales rose 4.1% year on year to $21.29 billion. Its non-GAAP profit of $1.76 per share was 4.4% above analysts’ consensus estimates.
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Wells Fargo (WFC) Q4 CY2025 Highlights:
- Net Interest Margin: 2.6% vs analyst estimates of 2.7% (5.5 basis point miss)
- Revenue: $21.29 billion vs analyst estimates of $21.65 billion (4.1% year-on-year growth, 1.6% miss)
- Efficiency Ratio: 64% vs analyst estimates of 62.7% (133 basis point miss)
- Adjusted EPS: $1.76 vs analyst estimates of $1.69 (4.4% beat)
- Tangible Book Value per Share: $45.02 vs analyst estimates of $44.62 (9.4% year-on-year growth, 0.9% beat)
- Market Capitalization: $293.7 billion
Company Overview
Founded during the California Gold Rush in 1852 to provide banking and express delivery services to miners and merchants, Wells Fargo (NYSE: WFC) is a diversified financial services company that provides banking, lending, investment, and wealth management services to individuals and businesses.
Sales Growth
In general, banks make money from two primary sources. The first is net interest income, which is interest earned on loans, mortgages, and investments in securities minus interest paid out on deposits. The second source is non-interest income, which can come from bank account, credit card, wealth management, investing banking, and trading fees. Unfortunately, Wells Fargo’s 2.5% annualized revenue growth over the last five years was sluggish. This fell short of our benchmarks and is a poor baseline for our analysis.
We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Wells Fargo’s recent performance shows its demand has slowed as its revenue was flat over the last two years. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Wells Fargo’s revenue grew by 4.1% year on year to $21.29 billion, falling short of Wall Street’s estimates.
Net interest income made up 56.4% of the company’s total revenue during the last five years, meaning Wells Fargo’s growth drivers strike a balance between lending and non-lending activities.
While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.
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Tangible Book Value Per Share (TBVPS)
The balance sheet drives banking profitability since earnings flow from the spread between borrowing and lending rates. As such, valuations for these companies concentrate on capital strength and sustainable equity accumulation potential.
When analyzing banks, tangible book value per share (TBVPS) takes precedence over many other metrics. This measure isolates genuine per-share value by removing intangible assets of debatable liquidation worth. On the other hand, EPS is often distorted by mergers and flexible loan loss accounting. TBVPS provides clearer performance insights.
Wells Fargo’s TBVPS grew at a solid 6.3% annual clip over the last five years. The last two years show a similar trajectory as TBVPS grew by 7.2% annually from $39.21 to $45.02 per share.
Over the next 12 months, Consensus estimates call for Wells Fargo’s TBVPS to grow by 4.2% to $46.90, lousy growth rate.
Key Takeaways from Wells Fargo’s Q4 Results
It was good to see Wells Fargo narrowly top analysts’ tangible book value per share expectations this quarter. On the other hand, its revenue missed. Overall, this quarter could have been better. The stock traded down 1.1% to $92.51 immediately after reporting.
Wells Fargo’s latest earnings report disappointed. One quarter doesn’t define a company’s quality, so let’s explore whether the stock is a buy at the current price. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
