VersaBank (VBNK, Financial) is a Canadian chartered bank that operates as a branchless financial institution. It provides banking products and services in Canada and internationally. As of July 24, 2023, the company's stock price stands at $8.65, with a market capitalization of $226.834 million. The stock has seen a gain of 4.72% today and a significant increase of 16.52% over the past four weeks. The company operates in the banking industry, a sector known for its stability and steady returns.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus. It uses five aspects of valuation, which have been found to be closely correlated to the long-term performances of stocks. The GF Score for VersaBank is 82 out of 100, indicating good outperformance potential. The score takes into account the company's Financial Strength, Profitability Rank, Growth Rank, GF Value Rank, and Momentum Rank.
VersaBank's Financial Strength Rank
VersaBank's Financial Strength rank is 4 out of 10. This score is based on factors such as interest coverage, debt to revenue ratio, and Altman Z score. The company's debt to revenue ratio is 1.11, indicating a moderate level of debt relative to its revenue. However, the Altman Z-Score is not available, which could suggest potential financial distress or bankruptcy risk.
Profitability Rank Analysis
The Profitability Rank of VersaBank is 6 out of 10. This rank is based on factors such as Operating Margin, Piotroski F-Score, and the trend of the Operating Margin. The company's Piotroski F-Score is 8, indicating a healthy situation. However, the Operating Margin is not available, which could suggest potential profitability issues.
Growth Rank Analysis
VersaBank's Growth Rank is 7 out of 10, indicating a good growth potential. The rank is based on the 5-year revenue growth rate and the 3-year revenue growth rate, which are 7.10 and 5.60 respectively. However, the 5-year EBITDA growth rate is not available, which could suggest potential growth issues.
GF Value Rank Analysis
The GF Value Rank of VersaBank is 9 out of 10, indicating that the stock is undervalued. This rank is determined by the price-to-GF-Value ratio, a proprietary metric calculated based on historical multiples along with an adjustment factor based on a company's past returns and growth and future estimates of the business' performance.
Momentum Rank Analysis
VersaBank's Momentum Rank is 10 out of 10, indicating strong momentum in the stock's price. This rank is determined using the standardized momentum ratio and other momentum indicators.
Comparison with Competitors
When compared to its competitors in the banking industry, VersaBank performs well. Dunav Re a.d (XBEL:DNREM, Financial) has a GF Score of 60, Alfa Plam a.d (XBEL:ALFA, Financial) has a GF Score of 68, and Impol Seval a.d (XBEL:IMPL, Financial) has a GF Score of 74. This comparative analysis suggests that VersaBank is a strong performer within its industry.
In conclusion, VersaBank's strong GF Score, coupled with its good growth potential and strong momentum, make it an attractive investment option. However, investors should also consider the company's moderate financial strength and profitability issues when making investment decisions.
