VELOCITY FINANCIAL INC (VEL) Stock Fundamental Analysis
USA - NYSE:VEL - US92262D1019 - Common Stock
18.73 USD
+0.26 (+1.41%)
18.73 USD
0 (0%)
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. 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.
In the past 5 years VEL always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of VEL (1.24%) is comparable to the rest of the industry.
VEL's Return On Equity of 13.43% is fine compared to the rest of the industry. VEL outperforms 71.72% 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 64.65% of the companies in the same industry.
VEL had an Average Return On Invested Capital over the past 3 years of 4.55%. This is below the industry average of 7.79%.
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
Looking at the Profit Margin, with a value of 16.49%, VEL is in the better half of the industry, outperforming 69.70% 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 88.39%, VEL belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
VEL's Operating Margin has improved in the last couple of years.
The Gross Margin of VEL (88.82%) is better than 91.92% of its industry peers.
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.
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
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.
Looking at the Altman-Z score, with a value of 0.35, VEL is in line with its industry, outperforming 47.47% of the companies in the same industry.
The Debt to FCF ratio of VEL is 224.95, which is on the high side as it means it would take VEL, 224.95 years of fcf income to pay off all of its debts.
VEL's Debt to FCF ratio of 224.95 is on the low side compared to the rest of the industry. VEL is outperformed by 61.62% of its industry peers.
A Debt/Equity ratio of 9.55 is on the high side and indicates that VEL has dependencies on debt financing.
VEL has a worse Debt to Equity ratio (9.55) than 85.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 9.55 | ||
| Debt/FCF | 224.95 | ||
| Altman-Z | 0.35 |
ROIC/WACC0.89
WACC5.55%
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.
With a Current ratio value of 0.25, VEL is not doing good in the industry: 69.70% of the companies in the same industry are doing better.
VEL has a Quick 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 Quick ratio, with a value of 0.25, VEL is doing worse than 69.70% of the companies in the same industry.
| 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 31.28%, 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.
VEL shows a strong growth in Revenue. In the last year, the Revenue has grown by 33.95%.
VEL shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 20.82% yearly.
EPS 1Y (TTM)31.28%
EPS 3Y27.91%
EPS 5Y15.62%
EPS Q2Q%62.22%
Revenue 1Y (TTM)33.95%
Revenue growth 3Y29.96%
Revenue growth 5Y20.82%
Sales Q2Q%59.67%
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 Y16.92%
EPS Next 2Y11.53%
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
A Price/Earnings ratio of 7.97 indicates a rather cheap valuation of VEL.
Based on the Price/Earnings ratio, VEL is valued cheaper than 82.83% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.91, VEL is valued rather cheaply.
With a Price/Forward Earnings ratio of 7.42, 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.
When comparing the Price/Forward Earnings ratio of VEL to the average of the S&P500 Index (22.92), we can say VEL is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.97 | ||
| Fwd PE | 7.42 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of VEL indicates a somewhat cheap valuation: VEL is cheaper than 61.62% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of VEL is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.37 | ||
| EV/EBITDA | 13.87 |
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.
PEG (NY)0.47
PEG (5Y)0.51
EPS Next 2Y11.53%
EPS Next 3Y11.68%
5. Dividend
5.1 Amount
VEL does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
18.73
+0.26 (+1.41%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners62.62%
Inst Owner Change0.02%
Ins Owners2.91%
Ins Owner Change12.05%
Market Cap719.98M
Revenue(TTM)487.06M
Net Income(TTM)80.31M
Analysts77.14
Price Target21.76 (16.18%)
Short Float %1.21%
Short Ratio3.06
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)9.01%
EPS NQ rev (3m)11.35%
EPS NY rev (1m)0%
EPS NY rev (3m)5.7%
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 | 7.97 | ||
| Fwd PE | 7.42 | ||
| P/S | 1.48 | ||
| P/FCF | 28.37 | ||
| P/OCF | 26.77 | ||
| P/B | 1.2 | ||
| P/tB | 1.22 | ||
| EV/EBITDA | 13.87 |
EPS(TTM)2.35
EY12.55%
EPS(NY)2.53
Fwd EY13.48%
FCF(TTM)0.66
FCFY3.53%
OCF(TTM)0.7
OCFY3.74%
SpS12.67
BVpS15.55
TBVpS15.38
PEG (NY)0.47
PEG (5Y)0.51
Graham Number28.68
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 | 13.18 | ||
| Cap/Depr | 58.96% | ||
| Cap/Sales | 0.31% | ||
| Interest Coverage | 1.46 | ||
| Cash Conversion | 6.21% | ||
| Profit Quality | 31.6% | ||
| Current Ratio | 0.25 | ||
| Quick Ratio | 0.25 | ||
| Altman-Z | 0.35 |
F-Score4
WACC5.55%
ROIC/WACC0.89
Cap/Depr(3y)194.25%
Cap/Depr(5y)148.18%
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)31.28%
EPS 3Y27.91%
EPS 5Y15.62%
EPS Q2Q%62.22%
EPS Next Y16.92%
EPS Next 2Y11.53%
EPS Next 3Y11.68%
EPS Next 5YN/A
Revenue 1Y (TTM)33.95%
Revenue growth 3Y29.96%
Revenue growth 5Y20.82%
Sales Q2Q%59.67%
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 7.97 and the Price/Book (PB) ratio is 1.2.
What is the financial health of VELOCITY FINANCIAL INC (VEL) stock?
The financial health rating of VELOCITY FINANCIAL INC (VEL) is 0 / 10.