VELOCITY FINANCIAL INC (VEL) Stock Fundamental Analysis
USA - NYSE:VEL - US92262D1019 - Common Stock
18.25 USD
-0.11 (-0.6%)
We assign a fundamental rating of 5 out of 10 to VEL. VEL was compared to 99 industry peers in the Financial Services industry. VEL has an excellent profitability rating, but there are concerns on its financial health. An interesting combination arises when we look at growth and value: VEL is growing strongly while it also seems undervalued.
1. Profitability
1.1 Basic Checks
In the past year VEL was profitable.
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 51.52% of the companies in the same industry.
VEL has a better Return On Equity (13.43%) than 69.70% of its industry peers.
Looking at the Return On Invested Capital, with a value of 4.93%, VEL is in the better half of the industry, outperforming 65.66% 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 8.10%.
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 66.67% 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.
In the last couple of years the Operating Margin of VEL has grown nicely.
With an excellent Gross Margin value of 88.82%, VEL belongs to the best of the industry, outperforming 91.92% 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
VEL has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
VEL has more shares outstanding than it did 1 year ago.
The number of shares outstanding for VEL has been increased compared to 5 years ago.
VEL has a worse debt/assets ratio than last year.
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.
VEL has a Altman-Z score of 0.35. This is comparable to the rest of the industry: VEL outperforms 47.47% of 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.
With a Debt to FCF ratio value of 224.95, VEL is not doing good in the industry: 62.63% of the companies in the same industry are doing better.
A Debt/Equity ratio of 9.55 is on the high side and indicates that VEL has dependencies on debt financing.
VEL's Debt to Equity ratio of 9.55 is on the low side compared to the rest of the industry. VEL is outperformed by 84.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 9.55 | ||
| Debt/FCF | 224.95 | ||
| Altman-Z | 0.35 |
ROIC/WACC0.91
WACC5.39%
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.
VEL has a worse Current ratio (0.25) than 68.69% of its industry peers.
A Quick Ratio of 0.25 indicates that VEL may have some problems paying its short term obligations.
With a Quick ratio value of 0.25, VEL is not doing good in the industry: 68.69% of the companies in the same industry are doing better.
| 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.
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 30.65% in the past year. This is a very strong growth!
The Revenue has been growing by 20.82% on average over the past years. This is a very strong growth!
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.
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
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
With a Price/Earnings ratio of 7.10, the valuation of VEL can be described as very cheap.
Based on the Price/Earnings ratio, VEL is valued cheaper than 84.85% of the companies in the same industry.
VEL is valuated cheaply when we compare the Price/Earnings ratio to 25.89, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 7.09, the valuation of VEL can be described as very cheap.
Based on the Price/Forward Earnings ratio, VEL is valued a bit cheaper than 72.73% of the companies in the same industry.
VEL is valuated cheaply when we compare the Price/Forward Earnings ratio to 34.59, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.1 | ||
| Fwd PE | 7.09 |
4.2 Price Multiples
VEL's Enterprise Value to EBITDA is on the same level as the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as VEL.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.64 | ||
| EV/EBITDA | 13.92 |
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)0.29
PEG (5Y)0.45
EPS Next 2Y12.64%
EPS Next 3Y11.68%
5. Dividend
5.1 Amount
No dividends for VEL!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NYSE:VEL (11/17/2025, 3:09:43 PM)
18.25
-0.11 (-0.6%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners62.62%
Inst Owner Change0.68%
Ins Owners2.91%
Ins Owner Change0.08%
Market Cap701.53M
Revenue(TTM)416.78M
Net Income(TTM)80.31M
Analysts77.14
Price Target21.76 (19.23%)
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)6.76%
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 | 7.1 | ||
| Fwd PE | 7.09 | ||
| P/S | 1.44 | ||
| P/FCF | 27.64 | ||
| P/OCF | 26.08 | ||
| P/B | 1.17 | ||
| P/tB | 1.19 | ||
| EV/EBITDA | 13.92 |
EPS(TTM)2.57
EY14.08%
EPS(NY)2.58
Fwd EY14.11%
FCF(TTM)0.66
FCFY3.62%
OCF(TTM)0.7
OCFY3.83%
SpS12.67
BVpS15.55
TBVpS15.38
PEG (NY)0.29
PEG (5Y)0.45
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
WACC5.39%
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 7.1 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.