VELOCITY FINANCIAL INC (VEL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:VEL - US92262D1019 - Common Stock
19.01 USD
+0.2 (+1.06%)
19.01 USD
0 (0%)
Taking everything into account, VEL scores 5 out of 10 in our fundamental rating. VEL was compared to 97 industry peers in the Financial Services industry. VEL has an excellent profitability rating, but 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
In the past year VEL was profitable.
In the past year VEL had a positive cash flow from operations.
Of the past 5 years VEL 4 years were profitable.
VEL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
VEL has a Return On Assets (1.29%) which is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 14.15%, VEL is in the better half of the industry, outperforming 73.20% of the companies in the same industry.
VEL has a Return On Invested Capital of 4.05%. This is comparable to the rest of the industry: VEL outperforms 56.70% of its industry peers.
VEL had an Average Return On Invested Capital over the past 3 years of 4.55%. This is below the industry average of 8.44%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.29% | ||
| ROE | 14.15% | ||
| ROIC | 4.05% |
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
With an excellent Profit Margin value of 20.70%, VEL belongs to the best of the industry, outperforming 80.41% of the companies in the same industry.
VEL's Profit Margin has improved in the last couple of years.
VEL has a Operating Margin of 87.86%. This is amongst the best in 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 86.20%, VEL belongs to the top of the industry, outperforming 89.69% of the companies in the same industry.
In the last couple of years the Gross Margin of VEL has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 87.86% | ||
| PM (TTM) | 20.7% | ||
| GM | 86.2% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so VEL is destroying value.
The number of shares outstanding for VEL has been increased compared to 1 year ago.
Compared to 5 years ago, VEL has more shares outstanding
VEL has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.30, we must say that VEL is in the distress zone and has some risk of bankruptcy.
VEL has a Altman-Z score (0.30) which is comparable to the rest of the industry.
VEL has a debt to FCF ratio of 110.82. This is a negative value and a sign of low solvency as VEL would need 110.82 years to pay back of all of its debts.
The Debt to FCF ratio of VEL (110.82) is worse than 68.04% of its industry peers.
A Debt/Equity ratio of 9.70 is on the high side and indicates that VEL has dependencies on debt financing.
VEL has a worse Debt to Equity ratio (9.70) than 86.60% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 9.7 | ||
| Debt/FCF | 110.82 | ||
| Altman-Z | 0.3 |
ROIC/WACC0.74
WACC5.45%
2.3 Liquidity
A Current Ratio of 0.29 indicates that VEL may have some problems paying its short term obligations.
VEL has a worse Current ratio (0.29) than 69.07% of its industry peers.
VEL has a Quick Ratio of 0.29. This is a bad value and indicates that VEL is not financially healthy enough and could expect problems in meeting its short term obligations.
VEL has a worse Quick ratio (0.29) than 69.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.29 | ||
| Quick Ratio | 0.29 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 35.98% over the past year.
Measured over the past years, VEL shows a quite strong growth in Earnings Per Share. The EPS has been growing by 15.62% on average per year.
Looking at the last year, VEL shows a quite strong growth in Revenue. The Revenue has grown by 11.61% in the last year.
Measured over the past years, VEL shows a very strong growth in Revenue. The Revenue has been growing by 20.82% on average per year.
EPS 1Y (TTM)35.98%
EPS 3Y27.91%
EPS 5Y15.62%
EPS Q2Q%46.81%
Revenue 1Y (TTM)11.61%
Revenue growth 3Y29.96%
Revenue growth 5Y20.82%
Sales Q2Q%54.24%
3.2 Future
VEL is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.68% yearly.
VEL is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 16.85% yearly.
EPS Next Y27.37%
EPS Next 2Y13.01%
EPS Next 3Y11.68%
EPS Next 5YN/A
Revenue Next Year5.29%
Revenue Next 2Y15.78%
Revenue Next 3Y16.85%
Revenue Next 5YN/A
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
Based on the Price/Earnings ratio of 7.40, the valuation of VEL can be described as very cheap.
VEL's Price/Earnings ratio is rather cheap when compared to the industry. VEL is cheaper than 83.51% of the companies in the same industry.
When comparing the Price/Earnings ratio of VEL to the average of the S&P500 Index (26.28), we can say VEL is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 7.33, the valuation of VEL can be described as very cheap.
Compared to the rest of the industry, the Price/Forward Earnings ratio of VEL indicates a somewhat cheap valuation: VEL is cheaper than 72.16% of the companies listed in the same industry.
VEL is valuated cheaply when we compare the Price/Forward Earnings ratio to 23.52, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.4 | ||
| Fwd PE | 7.33 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of VEL is on the same level as its industry peers.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of VEL indicates a somewhat cheap valuation: VEL is cheaper than 68.04% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.32 | ||
| EV/EBITDA | 16.97 |
4.3 Compensation for Growth
VEL's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
VEL has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)0.27
PEG (5Y)0.47
EPS Next 2Y13.01%
EPS Next 3Y11.68%
5. Dividend
5.1 Amount
VEL does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
19.01
+0.2 (+1.06%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners62.3%
Inst Owner Change0.73%
Ins Owners2.87%
Ins Owner Change0.02%
Market Cap739.49M
Revenue(TTM)433.35M
Net Income(TTM)89.72M
Analysts77.14
Price Target22.1 (16.25%)
Short Float %1.42%
Short Ratio5.11
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)24.22%
Min EPS beat(2)12.92%
Max EPS beat(2)35.52%
EPS beat(4)4
Avg EPS beat(4)18.9%
Min EPS beat(4)4.06%
Max EPS beat(4)35.52%
EPS beat(8)7
Avg EPS beat(8)16.55%
EPS beat(12)10
Avg EPS beat(12)12.95%
EPS beat(16)13
Avg EPS beat(16)13.53%
Revenue beat(2)2
Avg Revenue beat(2)103.33%
Min Revenue beat(2)95.7%
Max Revenue beat(2)110.96%
Revenue beat(4)3
Avg Revenue beat(4)48.54%
Min Revenue beat(4)-40.39%
Max Revenue beat(4)110.96%
Revenue beat(8)7
Avg Revenue beat(8)28.83%
Revenue beat(12)11
Avg Revenue beat(12)34.35%
Revenue beat(16)15
Avg Revenue beat(16)56.62%
PT rev (1m)1.56%
PT rev (3m)1.56%
EPS NQ rev (1m)8.94%
EPS NQ rev (3m)7.2%
EPS NY rev (1m)2.4%
EPS NY rev (3m)8.94%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)1.69%
Revenue NY rev (3m)1.69%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.4 | ||
| Fwd PE | 7.33 | ||
| P/S | 1.71 | ||
| P/FCF | 13.32 | ||
| P/OCF | 13.22 | ||
| P/B | 1.17 | ||
| P/tB | 1.18 | ||
| EV/EBITDA | 16.97 |
EPS(TTM)2.57
EY13.52%
EPS(NY)2.59
Fwd EY13.64%
FCF(TTM)1.43
FCFY7.51%
OCF(TTM)1.44
OCFY7.56%
SpS11.14
BVpS16.3
TBVpS16.13
PEG (NY)0.27
PEG (5Y)0.47
Graham Number30.71
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.29% | ||
| ROE | 14.15% | ||
| ROCE | 5.9% | ||
| ROIC | 4.05% | ||
| ROICexc | 4.11% | ||
| ROICexgc | 4.2% | ||
| OM | 87.86% | ||
| PM (TTM) | 20.7% | ||
| GM | 86.2% | ||
| FCFM | 12.81% |
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 Turnover0.06
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 9.7 | ||
| Debt/FCF | 110.82 | ||
| Debt/EBITDA | 16.18 | ||
| Cap/Depr | -82.23% | ||
| Cap/Sales | 0.1% | ||
| Interest Coverage | 1.2 | ||
| Cash Conversion | 14.71% | ||
| Profit Quality | 61.86% | ||
| Current Ratio | 0.29 | ||
| Quick Ratio | 0.29 | ||
| Altman-Z | 0.3 |
F-Score4
WACC5.45%
ROIC/WACC0.74
Cap/Depr(3y)327.67%
Cap/Depr(5y)228.23%
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 Y27.37%
EPS Next 2Y13.01%
EPS Next 3Y11.68%
EPS Next 5YN/A
Revenue 1Y (TTM)11.61%
Revenue growth 3Y29.96%
Revenue growth 5Y20.82%
Sales Q2Q%54.24%
Revenue Next Year5.29%
Revenue Next 2Y15.78%
Revenue Next 3Y16.85%
Revenue Next 5YN/A
EBIT growth 1Y12.08%
EBIT growth 3Y33.8%
EBIT growth 5Y23.72%
EBIT Next Year40.63%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-11.28%
FCF growth 3Y-17.04%
FCF growth 5YN/A
OCF growth 1Y-10.79%
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 8 / 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 7.4 and the Price/Book (PB) ratio is 1.17.
What is the financial health of VELOCITY FINANCIAL INC (VEL) stock?
The financial health rating of VELOCITY FINANCIAL INC (VEL) is 0 / 10.