VersaBank Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

As you might know, VersaBank (TSE:VBNK) last week released its latest first-quarter, and things did not turn out so great for shareholders. Results showed a clear earnings miss, with CA$28m revenue coming in 8.5% lower than what the analystsexpected. Statutory earnings per share (EPS) of CA$0.28 missed the mark badly, arriving some 28% below what was expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for VersaBank

Taking into account the latest results, the current consensus from VersaBank's three analysts is for revenues of CA$129.7m in 2025. This would reflect a meaningful 18% increase on its revenue over the past 12 months. Per-share earnings are expected to soar 51% to CA$1.59. In the lead-up to this report, the analysts had been modelling revenues of CA$142.7m and earnings per share (EPS) of CA$2.08 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.

It'll come as no surprise then, to learn that the analysts have cut their price target 5.9% to CA$26.76. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values VersaBank at CA$30.77 per share, while the most bearish prices it at CA$22.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting VersaBank's growth to accelerate, with the forecast 25% annualised growth to the end of 2025 ranking favourably alongside historical growth of 18% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.1% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect VersaBank to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for VersaBank. They also downgraded VersaBank's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple VersaBank analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with VersaBank , and understanding it should be part of your investment process.

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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.