VersaBank Just Missed EPS By 11%: Here's What Analysts Think Will Happen Next

Shareholders might have noticed that VersaBank (TSE:VBNK) filed its annual result this time last week. The early response was not positive, with shares down 7.2% to CA$23.16 in the past week. It was not a great result overall. While revenues of CA$112m were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 11% to hit CA$1.49 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for VersaBank

Taking into account the latest results, the consensus forecast from VersaBank's three analysts is for revenues of CA$139.4m in 2025. This reflects a huge 25% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 51% to CA$2.25. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$141.9m and earnings per share (EPS) of CA$2.37 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 10% to CA$28.89, suggesting the revised estimates are not indicative of a weaker long-term future for the business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values VersaBank at CA$31.16 per share, while the most bearish prices it at CA$27.50. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the VersaBank's past performance and to peers in the same industry. 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 19% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that VersaBank is expected to grow much faster than its 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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for VersaBank that you should be aware of.

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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.