VELOCITY FINANCIAL INC (VEL) Stock Fundamental Analysis
USA - NYSE:VEL - US92262D1019 - Common Stock
18.91 USD
+0.17 (+0.91%)
18.91 USD
0 (0%)
VEL gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 98 industry peers in the Financial Services industry. While VEL belongs to the best of the industry regarding profitability, there are concerns on its financial health. VEL is growing strongly while it also seems undervalued. This is an interesting combination
1. Profitability
1.1 Basic Checks
VEL had positive earnings in the past year.
VEL had a positive operating cash flow in the past year.
Of the past 5 years VEL 4 years were profitable.
In the past 5 years VEL always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 1.24%, VEL is in line with its industry, outperforming 53.06% of the companies in the same industry.
VEL's Return On Equity of 13.43% is fine compared to the rest of the industry. VEL outperforms 70.41% of its industry peers.
VEL's Return On Invested Capital of 4.93% is fine compared to the rest of the industry. VEL outperforms 64.29% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for VEL is below the industry average of 7.85%.
The last Return On Invested Capital (4.93%) for VEL is above the 3 year average (4.55%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.24% | ||
| ROE | 13.43% | ||
| ROIC | 4.93% |
ROA(3y)1.08%
ROA(5y)0.5%
ROE(3y)11.12%
ROE(5y)5.87%
ROIC(3y)4.55%
ROIC(5y)4.48%
1.3 Margins
VEL has a Profit Margin of 16.49%. This is in the better half of the industry: VEL outperforms 68.37% of its industry peers.
VEL's Profit Margin has improved in the last couple of years.
VEL's Operating Margin of 88.39% is amongst the best of the industry. VEL outperforms 100.00% of its industry peers.
VEL's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 88.82%, VEL belongs to the top of the industry, outperforming 91.84% of the companies in the same industry.
VEL's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 88.39% | ||
| PM (TTM) | 16.49% | ||
| GM | 88.82% |
OM growth 3Y2.96%
OM growth 5Y2.4%
PM growth 3Y14.34%
PM growth 5Y8.7%
GM growth 3Y-2.01%
GM growth 5Y-1.17%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), VEL is destroying value.
Compared to 1 year ago, VEL has more shares outstanding
The number of shares outstanding for VEL has been increased compared to 5 years ago.
Compared to 1 year ago, VEL has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.35, we must say that VEL is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.35, VEL is in line with its industry, outperforming 46.94% of the companies in the same industry.
VEL has a debt to FCF ratio of 224.95. This is a negative value and a sign of low solvency as VEL would need 224.95 years to pay back of all of its debts.
VEL's Debt to FCF ratio of 224.95 is on the low side compared to the rest of the industry. VEL is outperformed by 62.24% of its industry peers.
A Debt/Equity ratio of 9.55 is on the high side and indicates that VEL has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 9.55, VEL is doing worse than 85.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 9.55 | ||
| Debt/FCF | 224.95 | ||
| Altman-Z | 0.35 |
ROIC/WACC0.91
WACC5.39%
2.3 Liquidity
A Current Ratio of 0.25 indicates that VEL may have some problems paying its short term obligations.
VEL has a Current ratio of 0.25. This is in the lower half of the industry: VEL underperforms 69.39% of its industry peers.
A Quick Ratio of 0.25 indicates that VEL may have some problems paying its short term obligations.
VEL has a Quick ratio of 0.25. This is in the lower half of the industry: VEL underperforms 69.39% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.25 | ||
| Quick Ratio | 0.25 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 35.98% over the past year.
VEL shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.62% yearly.
Looking at the last year, VEL shows a very strong growth in Revenue. The Revenue has grown by 30.65%.
VEL shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 20.82% yearly.
EPS 1Y (TTM)35.98%
EPS 3Y27.91%
EPS 5Y15.62%
EPS Q2Q%46.81%
Revenue 1Y (TTM)30.65%
Revenue growth 3Y29.96%
Revenue growth 5Y20.82%
Sales Q2Q%-12.13%
3.2 Future
The Earnings Per Share is expected to grow by 11.68% on average over the next years. This is quite good.
Based on estimates for the next years, VEL will show a quite strong growth in Revenue. The Revenue will grow by 16.85% on average per year.
EPS Next Y24.38%
EPS Next 2Y12.64%
EPS Next 3Y11.68%
EPS Next 5YN/A
Revenue Next Year3.54%
Revenue Next 2Y15.88%
Revenue Next 3Y16.85%
Revenue Next 5YN/A
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 7.36, the valuation of VEL can be described as very cheap.
Based on the Price/Earnings ratio, VEL is valued cheaper than 83.67% of the companies in the same industry.
When comparing the Price/Earnings ratio of VEL to the average of the S&P500 Index (25.83), we can say VEL is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 7.34, the valuation of VEL can be described as very cheap.
VEL's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. VEL is cheaper than 71.43% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of VEL to the average of the S&P500 Index (32.68), we can say VEL is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.36 | ||
| Fwd PE | 7.34 |
4.2 Price Multiples
60.20% of the companies in the same industry are more expensive than VEL, based on the Enterprise Value to EBITDA ratio.
VEL's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.64 | ||
| EV/EBITDA | 13.9 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of VEL may justify a higher PE ratio.
PEG (NY)0.3
PEG (5Y)0.47
EPS Next 2Y12.64%
EPS Next 3Y11.68%
5. Dividend
5.1 Amount
VEL does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
18.91
+0.17 (+0.91%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners62.62%
Inst Owner Change0.23%
Ins Owners2.91%
Ins Owner Change0.08%
Market Cap726.90M
Revenue(TTM)416.78M
Net Income(TTM)80.31M
Analysts77.14
Price Target21.76 (15.07%)
Short Float %1.48%
Short Ratio3.75
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)19.79%
Min EPS beat(2)4.06%
Max EPS beat(2)35.52%
EPS beat(4)3
Avg EPS beat(4)14.91%
Min EPS beat(4)-3.05%
Max EPS beat(4)35.52%
EPS beat(8)7
Avg EPS beat(8)15.38%
EPS beat(12)9
Avg EPS beat(12)11.57%
EPS beat(16)13
Avg EPS beat(16)13.8%
Revenue beat(2)1
Avg Revenue beat(2)35.28%
Min Revenue beat(2)-40.39%
Max Revenue beat(2)110.96%
Revenue beat(4)3
Avg Revenue beat(4)25.26%
Min Revenue beat(4)-40.39%
Max Revenue beat(4)110.96%
Revenue beat(8)7
Avg Revenue beat(8)19.16%
Revenue beat(12)11
Avg Revenue beat(12)37.12%
Revenue beat(16)15
Avg Revenue beat(16)57.91%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)11.35%
EPS NY rev (1m)6.38%
EPS NY rev (3m)12.44%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)8.73%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.36 | ||
| Fwd PE | 7.34 | ||
| P/S | 1.49 | ||
| P/FCF | 28.64 | ||
| P/OCF | 27.02 | ||
| P/B | 1.22 | ||
| P/tB | 1.23 | ||
| EV/EBITDA | 13.9 |
EPS(TTM)2.57
EY13.59%
EPS(NY)2.58
Fwd EY13.62%
FCF(TTM)0.66
FCFY3.49%
OCF(TTM)0.7
OCFY3.7%
SpS12.67
BVpS15.55
TBVpS15.38
PEG (NY)0.3
PEG (5Y)0.47
Graham Number29.99
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.24% | ||
| ROE | 13.43% | ||
| ROCE | 7.2% | ||
| ROIC | 4.93% | ||
| ROICexc | 4.99% | ||
| ROICexgc | 5.1% | ||
| OM | 88.39% | ||
| PM (TTM) | 16.49% | ||
| GM | 88.82% | ||
| FCFM | 5.21% |
ROA(3y)1.08%
ROA(5y)0.5%
ROE(3y)11.12%
ROE(5y)5.87%
ROIC(3y)4.55%
ROIC(5y)4.48%
ROICexc(3y)4.6%
ROICexc(5y)4.52%
ROICexgc(3y)4.66%
ROICexgc(5y)4.58%
ROCE(3y)6.64%
ROCE(5y)6.4%
ROICexgc growth 3Y6.61%
ROICexgc growth 5Y3.27%
ROICexc growth 3Y6.46%
ROICexc growth 5Y3.05%
OM growth 3Y2.96%
OM growth 5Y2.4%
PM growth 3Y14.34%
PM growth 5Y8.7%
GM growth 3Y-2.01%
GM growth 5Y-1.17%
F-Score4
Asset Turnover0.08
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 9.55 | ||
| Debt/FCF | 224.95 | ||
| Debt/EBITDA | 13.18 | ||
| Cap/Depr | 58.96% | ||
| Cap/Sales | 0.31% | ||
| Interest Coverage | 1.46 | ||
| Cash Conversion | 6.21% | ||
| Profit Quality | 31.6% | ||
| Current Ratio | 0.25 | ||
| Quick Ratio | 0.25 | ||
| Altman-Z | 0.35 |
F-Score4
WACC5.39%
ROIC/WACC0.91
Cap/Depr(3y)194.25%
Cap/Depr(5y)148.18%
Cap/Sales(3y)0.77%
Cap/Sales(5y)0.68%
Profit Quality(3y)96.08%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)35.98%
EPS 3Y27.91%
EPS 5Y15.62%
EPS Q2Q%46.81%
EPS Next Y24.38%
EPS Next 2Y12.64%
EPS Next 3Y11.68%
EPS Next 5YN/A
Revenue 1Y (TTM)30.65%
Revenue growth 3Y29.96%
Revenue growth 5Y20.82%
Sales Q2Q%-12.13%
Revenue Next Year3.54%
Revenue Next 2Y15.88%
Revenue Next 3Y16.85%
Revenue Next 5YN/A
EBIT growth 1Y35.8%
EBIT growth 3Y33.8%
EBIT growth 5Y23.72%
EBIT Next Year33.79%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-62.59%
FCF growth 3Y-17.04%
FCF growth 5YN/A
OCF growth 1Y-60.44%
OCF growth 3Y-13.14%
OCF growth 5YN/A
VELOCITY FINANCIAL INC / VEL FAQ
What is the ChartMill fundamental rating of VELOCITY FINANCIAL INC (VEL) stock?
ChartMill assigns a fundamental rating of 5 / 10 to VEL.
What is the valuation status of VELOCITY FINANCIAL INC (VEL) stock?
ChartMill assigns a valuation rating of 7 / 10 to VELOCITY FINANCIAL INC (VEL). This can be considered as Undervalued.
How profitable is VELOCITY FINANCIAL INC (VEL) stock?
VELOCITY FINANCIAL INC (VEL) has a profitability rating of 7 / 10.
What is the valuation of VELOCITY FINANCIAL INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for VELOCITY FINANCIAL INC (VEL) is 7.36 and the Price/Book (PB) ratio is 1.22.
What is the financial health of VELOCITY FINANCIAL INC (VEL) stock?
The financial health rating of VELOCITY FINANCIAL INC (VEL) is 0 / 10.