Analysts Are Updating Their Veritex Holdings, Inc. (NASDAQ:VBTX) Estimates After Its Yearly Results

As you might know, Veritex Holdings, Inc. (NASDAQ:VBTX) just kicked off its latest annual results with some very strong numbers. Results were good overall, with revenues beating analyst predictions by 2.8% to hit US$344m. Statutory earnings per share (EPS) came in at US$2.77, some 3.7% above whatthe analysts had expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Veritex Holdings

After the latest results, the six analysts covering Veritex Holdings are now predicting revenues of US$400.5m in 2022. If met, this would reflect a meaningful 16% improvement in sales compared to the last 12 months. Per-share earnings are expected to climb 10% to US$3.11. Before this earnings report, the analysts had been forecasting revenues of US$392.5m and earnings per share (EPS) of US$3.10 in 2022. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a slight bump in to revenue forecasts.

Even though revenue forecasts increased, there was no change to the consensus price target of US$48.50, suggesting the analysts are focused on earnings as the driver of value creation. 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. There are some variant perceptions on Veritex Holdings, with the most bullish analyst valuing it at US$49.00 and the most bearish at US$46.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Veritex Holdings' revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 16% growth on an annualised basis. This is compared to a historical growth rate of 35% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.9% annually. So it's pretty clear that, while Veritex Holdings' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Veritex Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Veritex Holdings analysts - going out to 2023, and you can see them free on our platform here.

You still need to take note of risks, for example - Veritex Holdings has 2 warning signs we think 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.