DA Davidson has adjusted its price target for Veritex Holdings (VBTX, Financial), reducing it from $34 to $32 while maintaining a Buy rating on the stock. This decision comes after reviewing the company's recent quarterly results, which largely aligned with expectations, apart from reduced expenses and an increase in fee income.
The financial institution highlighted that Veritex's loan production remains robust, indicating a potential positive shift in performance later this year and into 2026. However, such an improvement is contingent upon the resolution of current economic uncertainties, according to the firm’s analysis.
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 $29.83 with a high estimate of $32.00 and a low estimate of $27.00. The average target implies an upside of 28.26% from the current price of $23.26. 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 16.04% from the current price of $23.26. 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.
VBTX Key Business Developments
Release Date: April 23, 2025
- Net Operating Profit: $29 million or $0.54 per share.
- Pretax Pre-Provision Earnings: $43.4 million or 1.41%.
- Loan Decrease: $125 million or 5% annualized.
- Gross Loan Production: $750 million in Q1, with $237 million funded.
- Nonperforming Assets: Increased from $79 million to $97 million.
- Net Charge-offs: $4 million for the quarter.
- Tangible Book Value Per Share: $22.33, up from $21.61 at year-end.
- Quarterly Dividend Increase: 10% to $0.22 per share.
- Share Repurchase: 377,000 shares repurchased, with $37 million remaining on authorization.
- Allowance for Credit Losses: 119 basis points, rising to 127 basis points excluding mortgage warehouse.
- Loan-to-Deposit Ratio: Reduced from 104% to 89% over two-plus years.
- Net Interest Margin (NIM): Increased 11 basis points to 3.31% in Q1.
- Operating Noninterest Income: Increased 2.4% to $14.8 million.
- Operating Efficiency Ratio: Declined 2.5% to 60.4%.
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 million or $0.54 per share for the first quarter.
- The company achieved a pretax pre-provision earnings of $43.4 million, indicating strong operational performance.
- Deposit growth was solid, with a focus on bringing in lower-priced relationship dollars and reducing reliance on higher-priced non-relationship dollars.
- Credit quality showed positive trends, with a net decrease in past dues and criticized loans, and charge-offs below forecast.
- The tangible book value per share increased to $22.33, marking a 13.8% year-over-year increase, including dividends paid.
Negative Points
- Loan growth was challenged, with a decrease in loans of $125 million or 5% annualized for the quarter.
- Nonaccrual loans increased by $17 million, primarily due to targeted actions on select retail and office exposures.
- Total loans declined 1.3% during Q1 and 3% on a year-over-year basis, with higher-than-normal payoffs impacting growth.
- The company's reliance on wholesale funding, although reduced, still stands at 13.7%, indicating a need for further reduction.
- Operating expenses are expected to increase slightly due to investments in new hires, despite efforts to manage costs.
