VersaBank Just Missed Earnings - But Analysts Have Updated Their Models

The analysts might have been a bit too bullish on VersaBank (TSE:VBNK), given that the company fell short of expectations when it released its quarterly results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CA$39m, statutory earnings missed forecasts by 16%, coming in at just CA$0.31 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Following the latest results, VersaBank's three analysts are now forecasting revenues of CA$214.8m in 2027. This would be a sizeable 47% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 162% to CA$2.73. Before this earnings report, the analysts had been forecasting revenues of CA$207.0m and earnings per share (EPS) of CA$2.36 in 2027. So it seems there's been a definite increase in optimism about VersaBank's future following the latest results, with a decent improvement in the earnings per share forecasts in particular.

View our latest analysis for VersaBank

With these upgrades, we're not surprised to see that the analysts have lifted their price target 6.9% to CA$31.00per share.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that VersaBank's rate of growth is expected to accelerate meaningfully, with the forecast 36% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 15% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.9% per year. 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 takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around VersaBank's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business 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. At Simply Wall St, we have a full range of analyst estimates for VersaBank going out to 2028, and you can see them free on our platform here..

Before you take the next step you should know about the 1 warning sign for VersaBank that we have uncovered.

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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.