VELOCITY FINANCIAL INC (VEL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:VEL - US92262D1019 - Common Stock
19.53 USD
-0.17 (-0.86%)
19.53 USD
0 (0%)
VEL gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 99 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
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.
VEL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of VEL (1.29%) is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 14.15%, VEL is in the better half of the industry, outperforming 73.74% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 4.05%, VEL is in line with its industry, outperforming 57.58% of the companies in the same industry.
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
VEL's Profit Margin of 20.70% is amongst the best of the industry. VEL outperforms 80.81% of its industry peers.
In the last couple of years the Profit Margin of VEL has grown nicely.
VEL has a better Operating Margin (87.86%) than 100.00% of its industry peers.
VEL's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 86.20%, VEL belongs to the top of the industry, outperforming 89.90% of the companies in the same industry.
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so VEL is destroying value.
The number of shares outstanding for VEL has been increased compared to 1 year ago.
Compared to 5 years ago, VEL has more shares outstanding
VEL has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.31, we must say that VEL is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 0.31, VEL perfoms like the industry average, outperforming 49.49% of the companies in the same industry.
VEL has a debt to FCF ratio of 110.82. This is a negative value and a sign of low solvency as VEL would need 110.82 years to pay back of 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 65.66% 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 85.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 9.7 | ||
| Debt/FCF | 110.82 | ||
| Altman-Z | 0.31 |
ROIC/WACC0.74
WACC5.45%
2.3 Liquidity
A Current Ratio of 0.29 indicates that VEL may have some problems paying its short term obligations.
The Current ratio of VEL (0.29) is worse than 68.69% of its industry peers.
A Quick Ratio of 0.29 indicates that VEL may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.29, VEL is doing worse than 68.69% of the companies in the same industry.
| 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.
VEL shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 11.61%.
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.
Based on estimates for the next years, VEL will show a quite strong growth in Revenue. The Revenue will grow by 16.85% on average per year.
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
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 7.60 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 82.83% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of VEL to the average of the S&P500 Index (26.39), we can say VEL is valued rather cheaply.
With a Price/Forward Earnings ratio of 7.53, the valuation of VEL can be described as very cheap.
73.74% of the companies in the same industry are more expensive than VEL, based on the Price/Forward Earnings ratio.
VEL's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 23.84.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.6 | ||
| Fwd PE | 7.53 |
4.2 Price Multiples
VEL's Enterprise Value to EBITDA ratio is in line with the industry average.
65.66% of the companies in the same industry are more expensive than VEL, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.69 | ||
| EV/EBITDA | 17.04 |
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)0.28
PEG (5Y)0.49
EPS Next 2Y13.01%
EPS Next 3Y11.68%
5. Dividend
5.1 Amount
No dividends for VEL!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
19.53
-0.17 (-0.86%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners62.3%
Inst Owner Change0.73%
Ins Owners2.87%
Ins Owner Change-0.04%
Market Cap759.72M
Revenue(TTM)433.35M
Net Income(TTM)89.72M
Analysts77.14
Price Target22.1 (13.16%)
Short Float %1.69%
Short Ratio6.48
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)1.56%
PT rev (3m)1.56%
EPS NQ rev (1m)6.35%
EPS NQ rev (3m)7.2%
EPS NY rev (1m)2.4%
EPS NY rev (3m)8.94%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)1.69%
Revenue NY rev (3m)1.69%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.6 | ||
| Fwd PE | 7.53 | ||
| P/S | 1.75 | ||
| P/FCF | 13.69 | ||
| P/OCF | 13.59 | ||
| P/B | 1.2 | ||
| P/tB | 1.21 | ||
| EV/EBITDA | 17.04 |
EPS(TTM)2.57
EY13.16%
EPS(NY)2.59
Fwd EY13.27%
FCF(TTM)1.43
FCFY7.31%
OCF(TTM)1.44
OCFY7.36%
SpS11.14
BVpS16.3
TBVpS16.13
PEG (NY)0.28
PEG (5Y)0.49
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 | 0.31 |
F-Score4
WACC5.45%
ROIC/WACC0.74
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 of VELOCITY FINANCIAL INC (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 valuation of VELOCITY FINANCIAL INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for VELOCITY FINANCIAL INC (VEL) is 7.6 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.