VELOCITY FINANCIAL INC (VEL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:VEL - US92262D1019 - Common Stock
18.62 USD
+0.27 (+1.47%)
18.62 USD
0 (0%)
Overall VEL gets a fundamental rating of 5 out of 10. We evaluated VEL against 98 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
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.
In the past 5 years VEL always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of VEL (1.29%) is comparable to the rest of the industry.
VEL has a Return On Equity of 14.15%. This is in the better half of the industry: VEL outperforms 73.47% of its industry peers.
VEL has a Return On Invested Capital of 4.05%. This is comparable to the rest of the industry: VEL outperforms 57.14% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital 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
Looking at the Profit Margin, with a value of 20.70%, VEL belongs to the top of the industry, outperforming 80.61% of the companies in the same industry.
VEL's Profit Margin has improved in the last couple of years.
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.
The Gross Margin of VEL (86.20%) is better than 89.80% of its industry peers.
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.
Compared to 1 year ago, VEL has more shares outstanding
Compared to 5 years ago, VEL has more shares outstanding
Compared to 1 year ago, VEL has a worse debt to assets ratio.
2.2 Solvency
VEL has an Altman-Z score of 0.30. This is a bad value and indicates that VEL is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of VEL (0.30) is comparable to the rest of the industry.
The Debt to FCF ratio of VEL is 110.82, which is on the high side as it means it would take VEL, 110.82 years of fcf income to pay off all of its debts.
VEL has a Debt to FCF ratio of 110.82. This is in the lower half of the industry: VEL underperforms 65.31% 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.
VEL has a worse Debt to Equity ratio (9.70) than 84.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 9.7 | ||
| Debt/FCF | 110.82 | ||
| Altman-Z | 0.3 |
ROIC/WACC0.7
WACC5.83%
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 65.31% of its industry peers.
A Quick Ratio of 0.29 indicates that VEL may have some problems paying its short term obligations.
VEL has a Quick ratio of 0.29. This is in the lower half of the industry: VEL underperforms 65.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.29 | ||
| Quick Ratio | 0.29 |
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.
VEL shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.62% yearly.
The Revenue has grown by 11.61% in the past year. This is quite good.
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
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
A Price/Earnings ratio of 7.25 indicates a rather cheap valuation of VEL.
Compared to the rest of the industry, the Price/Earnings ratio of VEL indicates a rather cheap valuation: VEL is cheaper than 83.67% of the companies listed in the same industry.
VEL's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.19.
With a Price/Forward Earnings ratio of 7.18, the valuation of VEL can be described as very cheap.
76.53% of the companies in the same industry are more expensive than VEL, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 23.92. VEL is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.25 | ||
| Fwd PE | 7.18 |
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 68.37% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.05 | ||
| EV/EBITDA | 16.95 |
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.
The decent profitability rating of VEL may justify a higher PE ratio.
PEG (NY)0.26
PEG (5Y)0.46
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 | 0% |
18.62
+0.27 (+1.47%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners62.47%
Inst Owner Change-0.02%
Ins Owners2.84%
Ins Owner Change-0.08%
Market Cap724.32M
Revenue(TTM)433.35M
Net Income(TTM)89.72M
Analysts77.14
Price Target22.1 (18.69%)
Short Float %1.38%
Short Ratio5.14
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
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)0%
PT rev (3m)1.56%
EPS NQ rev (1m)0%
EPS NQ rev (3m)8.94%
EPS NY rev (1m)0%
EPS NY rev (3m)8.94%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.69%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.25 | ||
| Fwd PE | 7.18 | ||
| P/S | 1.67 | ||
| P/FCF | 13.05 | ||
| P/OCF | 12.95 | ||
| P/B | 1.14 | ||
| P/tB | 1.15 | ||
| EV/EBITDA | 16.95 |
EPS(TTM)2.57
EY13.8%
EPS(NY)2.59
Fwd EY13.92%
FCF(TTM)1.43
FCFY7.66%
OCF(TTM)1.44
OCFY7.72%
SpS11.14
BVpS16.3
TBVpS16.13
PEG (NY)0.26
PEG (5Y)0.46
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
WACC5.83%
ROIC/WACC0.7
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 for 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 earnings growth outlook for VELOCITY FINANCIAL INC?
The Earnings per Share (EPS) of VELOCITY FINANCIAL INC (VEL) is expected to grow by 27.37% in the next year.