VELOCITY FINANCIAL INC (VEL)
US92262D1019 - Common Stock
Overall VEL gets a fundamental rating of 5 out of 10. We evaluated VEL against 100 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 has both an excellent growth and valuation score. This means it is growing and it is still cheap. This is a rare 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.
VEL had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
VEL has a Return On Assets (1.24%) which is in line with its industry peers.
VEL's Return On Equity of 12.87% is fine compared to the rest of the industry. VEL outperforms 61.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 4.91%, VEL is in the better half of the industry, outperforming 72.00% of the companies in the same industry.
VEL had an Average Return On Invested Capital over the past 3 years of 4.33%. This is below the industry average of 7.54%.
The 3 year average ROIC (4.33%) for VEL is below the current ROIC(4.91%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.24% | ||
| ROE | 12.87% | ||
| ROIC | 4.91% |
ROA(3y)0.92%
ROA(5y)0.41%
ROE(3y)8.78%
ROE(5y)5.52%
ROIC(3y)4.33%
ROIC(5y)4.4%
1.3 Margins
VEL's Profit Margin of 16.68% is fine compared to the rest of the industry. VEL outperforms 68.00% of its industry peers.
VEL's Profit Margin has improved in the last couple of years.
VEL has a better Operating Margin (87.19%) than 99.00% 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 90.03%, VEL belongs to the top of the industry, outperforming 93.00% 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 | 87.19% | ||
| PM (TTM) | 16.68% | ||
| GM | 90.03% |
OM growth 3Y4.68%
OM growth 5Y2.39%
PM growth 3YN/A
PM growth 5Y21.75%
GM growth 3Y-1.82%
GM growth 5Y-1.03%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), VEL is destroying value.
VEL has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, VEL has more shares outstanding
Compared to 1 year ago, VEL has an improved debt to assets ratio.
2.2 Solvency
VEL has an Altman-Z score of 0.35. This is a bad value and indicates that VEL is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 0.35, VEL perfoms like the industry average, outperforming 46.00% of the companies in the same industry.
The Debt to FCF ratio of VEL is 123.05, which is on the high side as it means it would take VEL, 123.05 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 123.05, VEL is not doing good in the industry: 65.00% of the companies in the same industry are doing better.
VEL has a Debt/Equity ratio of 9.04. This is a high value indicating a heavy dependency on external financing.
VEL's Debt to Equity ratio of 9.04 is on the low side compared to the rest of the industry. VEL is outperformed by 89.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 9.04 | ||
| Debt/FCF | 123.05 | ||
| Altman-Z | 0.35 |
ROIC/WACC0.87
WACC5.67%
2.3 Liquidity
VEL has a Current Ratio of 0.21. 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 Current ratio (0.21) than 73.00% of its industry peers.
VEL has a Quick Ratio of 0.21. This is a bad value and indicates that VEL is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.21, VEL is not doing good in the industry: 73.00% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.21 | ||
| Quick Ratio | 0.21 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 40.00% over the past year.
The Earnings Per Share has been growing by 30.08% on average over the past years. This is a very strong growth
Looking at the last year, VEL shows a very strong growth in Revenue. The Revenue has grown by 28.89%.
Measured over the past years, VEL shows a very strong growth in Revenue. The Revenue has been growing by 20.44% on average per year.
EPS 1Y (TTM)40%
EPS 3Y25.45%
EPS 5Y30.08%
EPS Q2Q%27.03%
Revenue 1Y (TTM)28.89%
Revenue growth 3Y22.18%
Revenue growth 5Y20.44%
Sales Q2Q%-21.34%
3.2 Future
Based on estimates for the next years, VEL will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.00% on average per year.
VEL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.71% yearly.
EPS Next Y26.58%
EPS Next 2Y18.12%
EPS Next 3Y13%
EPS Next 5YN/A
Revenue Next Year4.47%
Revenue Next 2Y7.71%
Revenue Next 3YN/A
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 decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 10.84, which indicates a very decent valuation of VEL.
68.00% of the companies in the same industry are more expensive than VEL, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 28.96, VEL is valued rather cheaply.
With a Price/Forward Earnings ratio of 9.54, the valuation of VEL can be described as very reasonable.
65.00% of the companies in the same industry are more expensive than VEL, based on the Price/Forward Earnings ratio.
VEL's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 23.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.84 | ||
| Fwd PE | 9.54 |
4.2 Price Multiples
62.00% 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 | 19.59 | ||
| EV/EBITDA | 14.63 |
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.
VEL's earnings are expected to grow with 13.00% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.41
PEG (5Y)0.36
EPS Next 2Y18.12%
EPS Next 3Y13%
5. Dividend
5.1 Amount
VEL does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
VELOCITY FINANCIAL INC
NYSE:VEL (11/22/2024, 1:51:16 PM)
20.49
+0.2 (+0.99%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap678.42M
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.84 | ||
| Fwd PE | 9.54 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.41
PEG (5Y)0.36
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.24% | ||
| ROE | 12.87% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 87.19% | ||
| PM (TTM) | 16.68% | ||
| GM | 90.03% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.07
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 9.04 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.21 | ||
| Quick Ratio | 0.21 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)40%
EPS 3Y25.45%
EPS 5Y
EPS Q2Q%
EPS Next Y26.58%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)28.89%
Revenue growth 3Y22.18%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y