As you might know, Merchants Bancorp (NASDAQ:MBIN) last week released its latest first-quarter, and things did not turn out so great for shareholders. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of US$146m missed by 14%, and statutory earnings per share of US$0.93 fell short of forecasts by 28%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.NasdaqCM:MBIN Earnings and Revenue Growth May 1st 2025

Taking into account the latest results, the most recent consensus for Merchants Bancorp from three analysts is for revenues of US$639.1m in 2025. If met, it would imply a satisfactory 2.9% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to decline 14% to US$4.64 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$692.7m and earnings per share (EPS) of US$5.76 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.

Check out our latest analysis for Merchants Bancorp

It'll come as no surprise then, to learn that the analysts have cut their price target 10% to US$40.67. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Merchants Bancorp analyst has a price target of US$42.00 per share, while the most pessimistic values it at US$39.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. We would highlight that Merchants Bancorp's revenue growth is expected to slow, with the forecast 3.8% annualised growth rate until the end of 2025 being well below the historical 17% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.0% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Merchants Bancorp.

Story Continues

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Merchants Bancorp. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Merchants Bancorp going out to 2027, and you can see them free on our platform here..

It might also be worth considering whether Merchants Bancorp's debt load is appropriate, using our debt analysis tools  on the Simply Wall St platform, here.

Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

View Comments