Is Dime Community Bancshares (DCOM) a Buy After a Strong Q3 Revenue Beat but EPS Miss?

In the ever-evolving landscape of regional banking, Dime Community Bancshares (DCOM) has delivered a mixed performance in Q3 2025, sparking debates about its long-term growth potential. While the company's revenue exceeded expectations, its earnings per share (EPS) fell short, raising questions about the sustainability of its strategic initiatives. This analysis evaluates DCOM's recent results, management's forward-looking guidance, and analyst sentiment to determine whether the stock warrants a "buy" rating amid these divergent signals.

A Revenue Beat Amid Elevated Costs

DCOM's Q3 2025 revenue surged 33.3% year-over-year to $116.7 million, outpacing analyst estimates of $112.9 million by 3.4%, according to a Yahoo Finance deep dive. This growth was driven by robust core deposit inflows and business loan expansion. Core deposits grew by $971.9 million year-over-year, while business loans increased by $409.1 million over the same period, according to the company's press release. These figures underscore DCOM's ability to capitalize on its regional footprint and customer-centric strategies.

However, the EPS miss-non-GAAP earnings of $0.61 versus the $0.69 expected-highlighted structural challenges. Elevated loan loss provisions tied to real estate charge-offs and increased operational costs from recent commercial banking hires weighed on profitability, as the Yahoo Finance deep dive noted. Those headwinds were partially offset by a net interest margin (NIM) of 3.01%, the highest in six quarters, which management expects to expand further in Q4 2025, per the same Yahoo Finance analysis.

Strategic Momentum and Analyst Optimism

Despite the near-term earnings disappointment, DCOM's management emphasized long-term strategic progress. The company opened a new Manhattan branch and plans further expansions in New Jersey and Long Island, the company's press release said, signaling confidence in its market penetration. Additionally, the recruitment of key commercial lending executives and a diversified balance sheet position DCOM to benefit from a potential economic recovery.

Analyst sentiment remains cautiously optimistic. As of October 2025, the average 12-month price target for DCOM stands at $36.40, implying a 25.95% upside from its current price of $28.90, according to a GuruFocus preview. Brokerage firms have assigned an "Outperform" rating, with an average score of 1.6 on a 1–5 scale, GuruFocus reported. This optimism is partly fueled by management's guidance that $1.35 billion in loans will reprice in 2026, with an additional $1.7 billion expected to reprice in 2027, potentially boosting margins, as the Yahoo Finance piece suggested.

Balancing Risks and Rewards

The key question for investors is whether DCOM's near-term profitability challenges will persist or be offset by its strategic initiatives. While the EPS miss reflects the costs of growth and economic uncertainties, the revenue beat and NIM expansion suggest resilience. The company's focus on business loans-a sector with higher margins-could drive long-term value creation, particularly if interest rates stabilize or decline.

However, risks remain. Elevated loan loss provisions and the costs of branch expansion could pressure margins if credit conditions deteriorate. Additionally, the regional banking sector faces regulatory and competitive pressures, which may amplify volatility.

Conclusion: A Buy for the Long-Term

DCOM's Q3 results present a nuanced picture: a revenue beat that validates its growth strategy and an EPS miss that underscores near-term challenges. Yet, the company's strategic investments, coupled with bullish analyst sentiment and a projected margin expansion, suggest that the stock is positioned for long-term appreciation. For investors with a multi-year horizon, DCOM appears to be a compelling buy, provided they are prepared to navigate short-term volatility.