DA Davidson has revised the price target for Veritex (VBTX, Financial), reducing it to $32 from the previous $34, while maintaining a Buy rating on the stock. The adjustment follows the company's first-quarter earnings report, which mostly met expectations, though lower expenses and increased fee income were notable exceptions.
In contrast to the reduced price target, DA Davidson has increased its earnings per share (EPS) projections for Veritex for the upcoming years. The firm now anticipates EPS of $2.24 in 2025 and $2.44 in 2026, up from prior estimates of $2.22 and $2.43, respectively.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for Veritex Holdings Inc (VBTX, Financial) is $31.83 with a high estimate of $34.00 and a low estimate of $30.00. The average target implies an upside of 36.45% from the current price of $23.33. More detailed estimate data can be found on the Veritex Holdings Inc (VBTX) Forecast page.
Based on the consensus recommendation from 6 brokerage firms, Veritex Holdings Inc's (VBTX, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Veritex Holdings Inc (VBTX, Financial) in one year is $26.99, suggesting a upside of 15.69% from the current price of $23.33. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Veritex Holdings Inc (VBTX) Summary page.
Key Business Developments
Release Date: January 29, 2025
- Net Operating Profit (Q4 2024): $29.8 million or $0.54 per share.
- Pretax Pre-Provision Earnings (Q4 2024): $41 million or 1.28%.
- Operating Earnings (Full Year 2024): $119.4 million or $2.17 per share.
- Net Interest Margin (Q4 2024): Decreased to 3.20%.
- Common Equity Tier 1 (CET1) Ratio: 11.09%, expanded by 23 basis points during the quarter.
- Tangible Book Value Per Share: $21.61, with a 10.9% increase year-over-year.
- Allowance for Credit Losses (ACL): 118 basis points, with general reserves comprising 97% of the total allowance.
- Total Loans (Q4 2024): Declined 1.2% during the quarter and 0.7% year-over-year.
- Loan-to-Deposit Ratio: Reduced from 104% to 89% over the past two years.
- Net Interest Income (Q4 2024): Decreased by $4 million.
- Operating Noninterest Income (Q4 2024): Increased by $1.3 million to $14.5 million.
- Operating Expenses (Q4 2024): Increased by $1 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Veritex Holdings Inc (VBTX, Financial) reported a net operating profit of $29.8 million for the fourth quarter, indicating strong financial performance.
- The company has successfully reduced its reliance on wholesale funding by 20% over the past year, improving its liquidity position.
- Criticized loans have declined by 20% year-over-year, showcasing effective credit risk management.
- The CET1 ratio expanded by 80 basis points year-over-year, reflecting a stronger capital position.
- Veritex Holdings Inc (VBTX) has seen strong deposit growth, allowing it to reduce its loan-to-deposit ratio from 104% to 89% over the past two years.
Negative Points
- Net interest margin (NIM) decreased by 10 basis points from Q3 to 3.20%, indicating pressure on interest income.
- Total loans declined by 1.2% during Q4 and 0.7% on a year-over-year basis, reflecting challenges in loan growth.
- Non-performing assets (NPAs) increased from $67.3 million at the end of Q3 to $79.2 million at year-end, indicating some deterioration in asset quality.
- The company experienced a decrease in tangible book value per share, down slightly from the third quarter of 2024.
- Veritex Holdings Inc (VBTX) did not purchase any shares during the quarter, leaving 93% of the authorized stock buyback program unused.
