VersaBank (NASDAQ:VBNK) Shares Gap Up - Should You Buy?

Key Points

• VersaBank shares opened sharply higher, rising from a prior close of $20.59 to $22.40, with the latest trade at $22.3150. The stock has a market capitalization of approximately $725 million.
• Analyst sentiment is mixed but leans positive: Roth Capital raised its price target to $28 with a “Buy” rating, while other firms maintained or issued “Hold” ratings. MarketBeat reports an overall “Moderate Buy” consensus and a $24 average target.
• VersaBank missed quarterly expectations, reporting $0.27 in EPS versus the $0.34 consensus and revenue of $27.67 million versus $28.76 million expected. The bank also declared a quarterly dividend of $0.025 per share, equal to a 0.4% annualized yield.

VersaBank (NASDAQ:VBNK - Get Free Report)'s stock price gapped up before the market opened on Tuesday . The stock had previously closed at $20.59, but opened at $22.40. VersaBank shares last traded at $22.3150, with a volume of 12,023 shares changing hands.

Analyst Upgrades and Downgrades

Several brokerages recently weighed in on VBNK. Roth Capital raised their price target on shares of VersaBank from $25.00 to $28.00 and gave the company a "buy" rating in a research report on Thursday. Weiss Ratings reaffirmed a "hold (c+)" rating on shares of VersaBank in a research report on Friday. Zacks Research downgraded VersaBank from a "strong-buy" rating to a "hold" rating in a research note on Tuesday, August 18th. Finally, Raymond James Financial set a $20.00 target price on VersaBank in a report on Thursday. Two investment analysts have rated the stock with a Buy rating and two have given a Hold rating to the company's stock. According to MarketBeat.com, the company has an average rating of "Moderate Buy" and an average target price of $24.00.

VersaBank Stock Up 0.1%

The stock has a market capitalization of $725.13 million, a PE ratio of 29.53 and a beta of 1.06. The firm's fifty day moving average price is $20.44 and its two-hundred day moving average price is $18.18.

VersaBank (NASDAQ:VBNK - Get Free Report) last posted its earnings results on Thursday, September 3rd. The company reported $0.27 EPS for the quarter, missing analysts' consensus estimates of $0.34 by ($0.07). The company had revenue of $27.67 million during the quarter, compared to the consensus estimate of $28.76 million. VersaBank had a return on equity of 8.66% and a net margin of 9.92%. As a group, analysts predict that VersaBank will post 1.26 EPS for the current year.

VersaBank Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Saturday, October 31st. Investors of record on Friday, October 9th will be given a dividend of $0.025 per share. This represents a $0.10 dividend on an annualized basis and a yield of 0.4%. The ex-dividend date is Friday, October 9th. VersaBank's dividend payout ratio is 9.21%.

Institutional Investors Weigh In On VersaBank

A number of large investors have recently made changes to their positions in VBNK. Salzhauer Michael lifted its stake in shares of VersaBank by 68.4% in the 2nd quarter. Salzhauer Michael now owns 16,843 shares of the company's stock worth $192,000 after purchasing an additional 6,843 shares during the period. Citadel Advisors LLC bought a new stake in VersaBank during the third quarter valued at approximately $198,000. Quadrature Capital Ltd bought a new stake in VersaBank during the fourth quarter valued at approximately $201,000. First Trust Advisors LP increased its holdings in VersaBank by 33.0% during the second quarter. First Trust Advisors LP now owns 20,753 shares of the company's stock valued at $237,000 after buying an additional 5,144 shares during the last quarter. Finally, K2 Principal Fund L.P. purchased a new stake in VersaBank during the second quarter valued at approximately $239,000. 56.86% of the stock is currently owned by institutional investors.

VersaBank Company Profile

VersaBank is a Canadian Schedule I chartered bank that operates as a fully digital institution, offering a range of deposit and lending solutions through its proprietary technology platform. Headquartered in London, Ontario, the bank has chosen to forego a traditional branch network in favor of online and digital distribution, enabling it to serve clients across Canada and the United States with efficiency and lower overhead.

The bank’s primary business activities include the origination and securitization of commercial loans, equipment financing, residential mortgages and construction loans.

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