VELOCITY FINANCIAL INC (VEL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:VEL - US92262D1019 - Common Stock
19.66 USD
+0.65 (+3.42%)
19.66 USD
0 (0%)
VEL gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 97 industry peers in the Financial Services industry. While VEL has a great profitability rating, there are quite some 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.
In the past year VEL had a positive cash flow from operations.
VEL had positive earnings in 4 of the past 5 years.
Each year in the past 5 years VEL had a positive operating cash flow.
1.2 Ratios
VEL's Return On Assets of 1.29% is in line compared to the rest of the industry. VEL outperforms 51.55% of its industry peers.
VEL has a Return On Equity of 14.15%. This is in the better half of the industry: VEL outperforms 73.20% of its industry peers.
VEL's Return On Invested Capital of 4.05% is in line compared to the rest of the industry. VEL outperforms 56.70% of its industry peers.
The Average Return On Invested Capital over the past 3 years for VEL 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
VEL has a Profit Margin of 20.70%. This is amongst the best in the industry. VEL outperforms 80.41% of its industry peers.
In the last couple of years the Profit Margin of VEL has grown nicely.
Looking at the Operating Margin, with a value of 87.86%, VEL belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Operating Margin of VEL has grown nicely.
With an excellent Gross Margin value of 86.20%, VEL belongs to the best 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), VEL is destroying value.
The number of shares outstanding for VEL has been increased compared to 1 year ago.
VEL has more shares outstanding than it did 5 years ago.
VEL has a worse debt/assets ratio than last year.
2.2 Solvency
VEL has an Altman-Z score of 0.31. 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 0.31, VEL perfoms like the industry average, outperforming 48.45% of the companies in the same 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.
VEL has a worse Debt to FCF ratio (110.82) than 68.04% of its industry peers.
VEL has a Debt/Equity ratio of 9.70. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 9.70, VEL is doing worse than 86.60% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 9.7 | ||
| Debt/FCF | 110.82 | ||
| Altman-Z | 0.31 |
ROIC/WACC0.75
WACC5.44%
2.3 Liquidity
VEL has a Current 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 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.
Looking at the Quick ratio, with a value of 0.29, VEL is doing worse than 69.07% of the companies in the same industry.
| 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.
The Earnings Per Share has been growing by 15.62% on average over the past years. This is quite good.
The Revenue has grown by 11.61% in the past year. This is quite good.
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)11.61%
Revenue growth 3Y29.96%
Revenue growth 5Y20.82%
Sales Q2Q%54.24%
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 11.68% on average per year.
The Revenue is expected to grow by 16.85% on average over the next years. This is quite good.
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 7.65, the valuation of VEL can be described as very cheap.
82.47% of the companies in the same industry are more expensive than VEL, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 26.59. VEL is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 7.58, which indicates a rather cheap valuation of VEL.
71.13% of the companies in the same industry are more expensive than VEL, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.80, VEL is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.65 | ||
| Fwd PE | 7.58 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as VEL.
VEL's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. VEL is cheaper than 65.98% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.78 | ||
| EV/EBITDA | 17.05 |
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.
VEL has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)0.28
PEG (5Y)0.49
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 |
19.66
+0.65 (+3.42%)
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 Cap764.77M
Revenue(TTM)433.35M
Net Income(TTM)89.72M
Analysts77.14
Price Target22.1 (12.41%)
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 | 7.65 | ||
| Fwd PE | 7.58 | ||
| P/S | 1.76 | ||
| P/FCF | 13.78 | ||
| P/OCF | 13.68 | ||
| P/B | 1.21 | ||
| P/tB | 1.22 | ||
| EV/EBITDA | 17.05 |
EPS(TTM)2.57
EY13.07%
EPS(NY)2.59
Fwd EY13.19%
FCF(TTM)1.43
FCFY7.26%
OCF(TTM)1.44
OCFY7.31%
SpS11.14
BVpS16.3
TBVpS16.13
PEG (NY)0.28
PEG (5Y)0.49
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 | 0.31 |
F-Score4
WACC5.44%
ROIC/WACC0.75
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 7.65 and the Price/Book (PB) ratio is 1.21.
What is the financial health of VELOCITY FINANCIAL INC (VEL) stock?
The financial health rating of VELOCITY FINANCIAL INC (VEL) is 0 / 10.