Investors in Merchants Bancorp (NASDAQ:MBIN) had a good week, as its shares rose 7.5% to close at US$41.93 following the release of its full-year results. It looks like a credible result overall - although revenues of US$646m were in line with what the analysts predicted, Merchants Bancorp surprised by delivering a statutory profit of US$6.30 per share, a notable 11% above expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Merchants Bancorp

Taking into account the latest results, the current consensus from Merchants Bancorp's three analysts is for revenues of US$693.7m in 2025. This would reflect a modest 7.3% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to drop 10% to US$5.56 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$655.2m and earnings per share (EPS) of US$4.91 in 2025. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a decent improvement in earnings per share in particular.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$52.17, suggesting that the forecast performance does not have a long term impact on the company's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Merchants Bancorp analyst has a price target of US$56.50 per share, while the most pessimistic values it at US$47.00. This is a very narrow spread of estimates, implying either that Merchants Bancorp is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Merchants Bancorp's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 7.3% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.7% annually. So it's pretty clear that, while Merchants Bancorp's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Merchants Bancorp following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at US$52.17, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Merchants Bancorp. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Merchants Bancorp analysts - going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Merchants Bancorp .

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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.