Evaluating Columbia Banking System After Merger Activity and Recent Share Price Movement

Wondering if Columbia Banking System is actually a bargain right now? You're not alone, especially with so many investors looking for value in today's market. The stock has seen some movement lately, up 4.1% over the past week and edging 1.1% higher in the last month. However, it remains down 3.1% year-to-date and 3.7% over the last year, hinting at mixed investor sentiment and evolving risk perceptions. Recent headlines around the regional banking sector, including shifting regulatory discussions and evolving interest rate expectations, have influenced Columbia's trading patterns. Notably, news about increased loan demand and a flurry of merger activity among regional banks have kept investors focused on the potential for future growth. With a valuation score of 4 out of 6, Columbia Banking System appears undervalued by several traditional checks. Let's break down those valuation methods and, by the end of the article, look at a more insightful way of thinking about what the company is really worth.

Find out why Columbia Banking System's -3.7% return over the last year is lagging behind its peers.

Approach 1: Columbia Banking System Excess Returns Analysis

The Excess Returns valuation approach examines whether a company is creating value by delivering returns on its invested capital above the basic cost of equity. For Columbia Banking System, this method places emphasis on the company's ability to consistently generate strong profits from shareholder investment over time.

Looking at the numbers, Columbia reports a Book Value of $25.41 per share and is expected to maintain a Stable EPS of $3.01 per share, based on consensus from eight analysts. The Cost of Equity is $1.92 per share, which means the company is generating an Excess Return of $1.09 per share. The firm’s average Return on Equity is estimated at 11.03%, and its Stable Book Value is projected to rise to $27.29 per share over the long term, according to estimates from ten analysts.

This robust level of excess returns indicates that the business has been able to sustainably produce earnings over and above shareholders’ required return. Based on this valuation, Columbia Banking System’s intrinsic value stands at $54.99 per share. This suggests the stock is currently trading at a 52.7% discount to its estimated worth.

Result: UNDERVALUED

Our Excess Returns analysis suggests Columbia Banking System is undervalued by 52.7%. Track this in your watchlist or portfolio, or discover 834 more undervalued stocks based on cash flows.COLB Discounted Cash Flow as at Oct 2025

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Columbia Banking System.

Story Continues

Approach 2: Columbia Banking System Price vs Earnings

The Price-to-Earnings (PE) ratio is the preferred multiple for valuing profitable companies like Columbia Banking System because it directly links the company’s share price to its earnings. This offers a clear indicator of how much investors are willing to pay for each dollar of profit. For established banks, PE is especially telling since profits are relatively stable, making it easier to gauge value.

Growth expectations and perceived risk are important drivers of what constitutes a “fair” PE ratio. Higher growth prospects or greater earnings stability can justify a higher PE, while more uncertainty or limited growth potential generally push it lower. Columbia’s current PE ratio is 14.73x, which stands above the average among its banking peers (24.79x) and also higher than the broader banking industry average of 11.16x. This suggests that, at first glance, the company is priced more attractively than many of its direct competitors, but carries a premium versus the industry as a whole.

Simply Wall St’s “Fair Ratio” offers a more nuanced benchmark. At 17.84x, it adjusts for factors such as Columbia’s expected earnings growth, profit margins, market capitalization, risk profile, and its industry context. This approach is superior to simply comparing with peers or industry averages, as it reflects what investors should reasonably pay given the company’s unique fundamentals. Since Columbia’s actual PE of 14.73x is meaningfully below the Fair Ratio, the stock looks undervalued on this basis.

Result: UNDERVALUEDNasdaqGS:COLB PE Ratio as at Oct 2025

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1408 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Columbia Banking System Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is your personal investment story, a way of connecting your unique perspective on Columbia Banking System’s future with the underlying numbers, like forecasts for revenue, earnings, and margins. By linking the company’s story to a financial forecast and ultimately to a fair value, Narratives help turn what you believe into actionable investment decisions.

Narratives are intuitive to use and are available to everyone in the Community page on Simply Wall St’s platform, where millions of investors share their viewpoints. This practical tool lets you compare your Fair Value estimate to the current Price and decide whether to buy, hold, or sell. Your Narrative updates dynamically as news, earnings, or new trends emerge.

For example, some investors might build a bullish Narrative for Columbia, focusing on rapid revenue growth and operational improvements, resulting in a higher fair value like $35.00 per share. Others may emphasize risks such as regional exposure and integration headwinds, leading to a more cautious fair value closer to $25.00. Whatever your view, Narratives empower you to make decisions based on your expectations and adapt as the market evolves.

Do you think there's more to the story for Columbia Banking System? Head over to our Community to see what others are saying!NasdaqGS:COLB Community Fair Values as at Oct 2025

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.

Companies discussed in this article include COLB.

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