VELOCITY FINANCIAL INC (VEL) Stock Fundamental Analysis
USA - NYSE:VEL - US92262D1019 - Common Stock
18.36 USD
-0.03 (-0.16%)
18.36 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. 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
VEL had positive earnings in the past year.
VEL had a positive operating cash flow in the past year.
VEL had positive earnings in 4 of the past 5 years.
VEL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of VEL (1.24%) is comparable to the rest of the industry.
With a decent Return On Equity value of 13.43%, VEL is doing good in the industry, outperforming 68.04% of the companies in the same industry.
With a decent Return On Invested Capital value of 4.93%, VEL is doing good in the industry, outperforming 63.92% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for VEL is below the industry average of 8.15%.
The 3 year average ROIC (4.55%) for VEL is below the current ROIC(4.93%), indicating increased profibility in the last year.
| 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
Looking at the Profit Margin, with a value of 16.49%, VEL is in the better half of the industry, outperforming 65.98% of the companies in the same industry.
VEL's Profit Margin has improved in the last couple of years.
The Operating Margin of VEL (88.39%) is better than 100.00% of its industry peers.
VEL's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 88.82%, VEL belongs to the best of the industry, outperforming 91.75% 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.
VEL has more shares outstanding than it did 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 0.35. This is a bad value and indicates that VEL is not financially healthy and even has some risk of bankruptcy.
VEL has a Altman-Z score (0.35) which is in line with its industry peers.
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 has a Debt to FCF ratio of 224.95. This is in the lower half of the industry: VEL underperforms 61.86% of its industry peers.
VEL has a Debt/Equity ratio of 9.55. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 9.55, VEL is not doing good in the industry: 85.57% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 9.55 | ||
| Debt/FCF | 224.95 | ||
| Altman-Z | 0.35 |
ROIC/WACC0.91
WACC5.43%
2.3 Liquidity
VEL has a Current Ratio of 0.25. 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 Current ratio, with a value of 0.25, VEL is doing worse than 69.07% of the companies in the same industry.
A Quick Ratio of 0.25 indicates that VEL may have some problems paying its short term obligations.
VEL has a worse Quick ratio (0.25) than 69.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.25 | ||
| Quick Ratio | 0.25 |
3. Growth
3.1 Past
VEL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 35.98%, which is quite impressive.
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.
VEL shows a strong growth in Revenue. In the last year, 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
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 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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 7.14 indicates a rather cheap valuation of VEL.
Based on the Price/Earnings ratio, VEL is valued cheaper than 84.54% of the companies in the same industry.
VEL's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.89.
The Price/Forward Earnings ratio is 7.13, which indicates a rather cheap valuation of VEL.
72.16% 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 34.59, VEL is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.14 | ||
| Fwd PE | 7.13 |
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 in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.81 | ||
| EV/EBITDA | 13.93 |
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)0.29
PEG (5Y)0.46
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 |
18.36
-0.03 (-0.16%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners62.62%
Inst Owner Change0.17%
Ins Owners2.91%
Ins Owner Change0.08%
Market Cap705.76M
Revenue(TTM)416.78M
Net Income(TTM)80.31M
Analysts77.14
Price Target21.76 (18.52%)
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 | 7.14 | ||
| Fwd PE | 7.13 | ||
| P/S | 1.45 | ||
| P/FCF | 27.81 | ||
| P/OCF | 26.24 | ||
| P/B | 1.18 | ||
| P/tB | 1.19 | ||
| EV/EBITDA | 13.93 |
EPS(TTM)2.57
EY14%
EPS(NY)2.58
Fwd EY14.03%
FCF(TTM)0.66
FCFY3.6%
OCF(TTM)0.7
OCFY3.81%
SpS12.67
BVpS15.55
TBVpS15.38
PEG (NY)0.29
PEG (5Y)0.46
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 | 13.24 | ||
| Cap/Depr | 218.39% | ||
| Cap/Sales | 0.31% | ||
| Interest Coverage | 1.46 | ||
| Cash Conversion | 6.24% | ||
| Profit Quality | 31.6% | ||
| Current Ratio | 0.25 | ||
| Quick Ratio | 0.25 | ||
| Altman-Z | 0.35 |
F-Score4
WACC5.43%
ROIC/WACC0.91
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 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 7.14 and the Price/Book (PB) ratio is 1.18.
What is the financial health of VELOCITY FINANCIAL INC (VEL) stock?
The financial health rating of VELOCITY FINANCIAL INC (VEL) is 0 / 10.