VELOCITY FINANCIAL INC (VEL) Stock Fundamental Analysis
USA - NYSE:VEL - US92262D1019 - Common Stock
18.29 USD
+0.15 (+0.83%)
18.29 USD
0 (0%)
VEL gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 101 industry peers in the Financial Services industry. While VEL belongs to the best of the industry regarding profitability, there are concerns on its financial health. VEL has both an excellent growth and valuation score. This means it is growing and it is still cheap. This is a rare 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
Looking at the Return On Assets, with a value of 1.24%, VEL is in line with its industry, outperforming 52.48% of the companies in the same industry.
VEL has a Return On Equity of 13.43%. This is in the better half of the industry: VEL outperforms 72.28% of its industry peers.
VEL has a better Return On Invested Capital (4.93%) than 65.35% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for VEL is below the industry average of 7.65%.
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
VEL has a better Profit Margin (16.49%) than 68.32% of its industry peers.
In the last couple of years the Profit Margin of VEL has grown nicely.
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.
VEL has a better Gross Margin (88.82%) than 92.08% 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 | 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.
Compared to 1 year ago, VEL has more shares outstanding
VEL has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, VEL has a worse debt to assets ratio.
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.
With a Altman-Z score value of 0.35, VEL perfoms like the industry average, outperforming 47.52% 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 has a Debt to FCF ratio of 224.95. This is comparable to the rest of the industry: VEL outperforms 40.59% 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.
Looking at the Debt to Equity ratio, with a value of 9.55, VEL is doing worse than 86.14% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 9.55 | ||
| Debt/FCF | 224.95 | ||
| Altman-Z | 0.35 |
ROIC/WACC0.85
WACC5.77%
2.3 Liquidity
A Current Ratio of 0.25 indicates that VEL may have some problems paying its short term obligations.
VEL has a worse Current ratio (0.25) than 68.32% of its industry peers.
A Quick Ratio of 0.25 indicates that VEL may have some problems paying its short term obligations.
VEL has a Quick ratio of 0.25. This is in the lower half of the industry: VEL underperforms 68.32% 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 31.28%, which is quite impressive.
The Earnings Per Share has been growing by 15.62% on average over the past years. This is quite good.
Looking at the last year, VEL shows a very strong growth in Revenue. 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
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 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
The Price/Earnings ratio is 7.78, which indicates a rather cheap valuation of VEL.
VEL's Price/Earnings ratio is rather cheap when compared to the industry. VEL is cheaper than 84.16% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.20. VEL is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 7.24, the valuation of VEL can be described as very cheap.
77.23% 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 22.70, VEL is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.78 | ||
| Fwd PE | 7.24 |
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 61.39% of the companies listed in the same industry.
VEL's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.7 | ||
| EV/EBITDA | 13.84 |
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)0.46
PEG (5Y)0.5
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 |
18.29
+0.15 (+0.83%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners63.54%
Inst Owner Change6.69%
Ins Owners3.06%
Ins Owner Change12.05%
Market Cap703.07M
Analysts77.14
Price Target21.76 (18.97%)
Short Float %1.3%
Short Ratio3.43
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)-2.06%
EPS NQ rev (3m)4.06%
EPS NY rev (1m)5.7%
EPS NY rev (3m)5.15%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)8.73%
Revenue NY rev (3m)8.73%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.78 | ||
| Fwd PE | 7.24 | ||
| P/S | 1.44 | ||
| P/FCF | 27.7 | ||
| P/OCF | 26.14 | ||
| P/B | 1.18 | ||
| P/tB | 1.19 | ||
| EV/EBITDA | 13.84 |
EPS(TTM)2.35
EY12.85%
EPS(NY)2.53
Fwd EY13.81%
FCF(TTM)0.66
FCFY3.61%
OCF(TTM)0.7
OCFY3.83%
SpS12.67
BVpS15.55
TBVpS15.38
PEG (NY)0.46
PEG (5Y)0.5
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%
ROICexcg growth 3Y6.61%
ROICexcg 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
WACC5.77%
ROIC/WACC0.85
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 Year20.18%
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