VELOCITY FINANCIAL INC (VEL)
US92262D1019 - Common Stock
Overall VEL gets a fundamental rating of 5 out of 10. We evaluated VEL against 99 industry peers in the Financial Services industry. VEL has an excellent profitability rating, but there are concerns on its financial health. VEL is evaluated to be cheap and growing strongly. This does not happen too often!
1. Profitability
1.1 Basic Checks
In the past year VEL was profitable.
VEL had a positive operating cash flow in the past year.
VEL had positive earnings in 4 of the past 5 years.
Of the past 5 years VEL 4 years had a positive operating cash flow.
1.2 Ratios
VEL has a Return On Assets (1.24%) which is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 13.28%, VEL is in line with its industry, outperforming 57.58% of the companies in the same industry.
VEL has a Return On Invested Capital of 4.92%. This is in the better half of the industry: VEL outperforms 71.72% of its industry peers.
VEL had an Average Return On Invested Capital over the past 3 years of 4.33%. This is below the industry average of 7.84%.
The 3 year average ROIC (4.33%) for VEL is below the current ROIC(4.92%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.24% | ||
| ROE | 13.28% | ||
| ROIC | 4.92% |
ROA(3y)0.92%
ROA(5y)0.41%
ROE(3y)8.78%
ROE(5y)5.52%
ROIC(3y)4.33%
ROIC(5y)4.4%
1.3 Margins
Looking at the Profit Margin, with a value of 16.58%, VEL is in the better half of the industry, outperforming 67.68% of the companies in the same industry.
In the last couple of years the Profit Margin of VEL has grown nicely.
The Operating Margin of VEL (87.49%) is better than 98.99% of its industry peers.
VEL's Operating Margin has improved in the last couple of years.
The Gross Margin of VEL (90.91%) is better than 94.95% 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 | 87.49% | ||
| PM (TTM) | 16.58% | ||
| GM | 90.91% |
OM growth 3Y4.68%
OM growth 5Y2.39%
PM growth 3YN/A
PM growth 5Y21.75%
GM growth 3Y-1.82%
GM growth 5Y-1.03%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so VEL is destroying value.
Compared to 1 year ago, VEL has more shares outstanding
The number of shares outstanding for VEL has been increased compared to 5 years ago.
The debt/assets ratio for VEL has been reduced compared to a year ago.
2.2 Solvency
VEL has an Altman-Z score of 0.31. This is a bad value and indicates that VEL is not financially healthy and even has some risk of bankruptcy.
VEL has a Altman-Z score (0.31) which is comparable to the rest of the industry.
VEL has a debt to FCF ratio of 178.78. This is a negative value and a sign of low solvency as VEL would need 178.78 years to pay back of all of its debts.
The Debt to FCF ratio of VEL (178.78) is worse than 61.62% of its industry peers.
A Debt/Equity ratio of 9.44 is on the high side and indicates that VEL has dependencies on debt financing.
VEL's Debt to Equity ratio of 9.44 is on the low side compared to the rest of the industry. VEL is outperformed by 88.89% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 9.44 | ||
| Debt/FCF | 178.78 | ||
| Altman-Z | 0.31 |
ROIC/WACC0.87
WACC5.68%
2.3 Liquidity
A Current Ratio of 0.13 indicates that VEL may have some problems paying its short term obligations.
VEL's Current ratio of 0.13 is on the low side compared to the rest of the industry. VEL is outperformed by 73.74% of its industry peers.
VEL has a Quick Ratio of 0.13. This is a bad value and indicates that VEL is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of VEL (0.13) is worse than 73.74% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.13 | ||
| Quick Ratio | 0.13 |
3. Growth
3.1 Past
VEL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 40.00%, which is quite impressive.
Measured over the past years, VEL shows a very strong growth in Earnings Per Share. The EPS has been growing by 30.08% on average per year.
Looking at the last year, VEL shows a very strong growth in Revenue. The Revenue has grown by 30.61%.
Measured over the past years, VEL shows a very strong growth in Revenue. The Revenue has been growing by 20.44% on average per year.
EPS 1Y (TTM)40%
EPS 3Y25.45%
EPS 5Y30.08%
EPS Q2Q%27.03%
Revenue 1Y (TTM)30.61%
Revenue growth 3Y22.18%
Revenue growth 5Y20.44%
Sales Q2Q%25.32%
3.2 Future
The Earnings Per Share is expected to grow by 13.00% on average over the next years. This is quite good.
The Revenue is expected to grow by 7.96% on average over the next years.
EPS Next Y25.59%
EPS Next 2Y19.91%
EPS Next 3Y13%
EPS Next 5YN/A
Revenue Next Year5.1%
Revenue Next 2Y7.96%
Revenue Next 3YN/A
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
VEL is valuated reasonably with a Price/Earnings ratio of 10.70.
66.67% of the companies in the same industry are more expensive than VEL, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 27.20. VEL is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 9.14, which indicates a very decent valuation of VEL.
Based on the Price/Forward Earnings ratio, VEL is valued a bit cheaper than 64.65% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.73. VEL is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.7 | ||
| Fwd PE | 9.14 |
4.2 Price Multiples
62.63% of the companies in the same industry are more expensive than VEL, based on the Enterprise Value to EBITDA ratio.
VEL's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.19 | ||
| EV/EBITDA | 13.99 |
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.
VEL's earnings are expected to grow with 13.00% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.42
PEG (5Y)0.36
EPS Next 2Y19.91%
EPS Next 3Y13%
5. Dividend
5.1 Amount
VEL does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
VELOCITY FINANCIAL INC
NYSE:VEL (12/20/2024, 8:04:00 PM)
After market: 20.23 0 (0%)20.23
-0.19 (-0.93%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners61.02%
Inst Owner Change0.78%
Ins Owners2.64%
Ins Owner Change0.03%
Market Cap669.82M
Analysts77.5
Price Target21.93 (8.4%)
Short Float %3.67%
Short Ratio21.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)3.14%
Min EPS beat(2)-3.05%
Max EPS beat(2)9.34%
EPS beat(4)3
Avg EPS beat(4)14.19%
Min EPS beat(4)-3.05%
Max EPS beat(4)29.47%
EPS beat(8)6
Avg EPS beat(8)9.97%
EPS beat(12)9
Avg EPS beat(12)11.74%
EPS beat(16)12
Avg EPS beat(16)20.43%
Revenue beat(2)2
Avg Revenue beat(2)5.3%
Min Revenue beat(2)2.6%
Max Revenue beat(2)8%
Revenue beat(4)4
Avg Revenue beat(4)9.13%
Min Revenue beat(4)2.6%
Max Revenue beat(4)18.4%
Revenue beat(8)8
Avg Revenue beat(8)27.25%
Revenue beat(12)12
Avg Revenue beat(12)59.31%
Revenue beat(16)16
Avg Revenue beat(16)77.6%
PT rev (1m)3.61%
PT rev (3m)3.61%
EPS NQ rev (1m)0%
EPS NQ rev (3m)13.45%
EPS NY rev (1m)-0.78%
EPS NY rev (3m)3.79%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)5.78%
Revenue NY rev (1m)0.6%
Revenue NY rev (3m)0.94%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.7 | ||
| Fwd PE | 9.14 | ||
| P/S | 1.73 | ||
| P/FCF | 26.19 | ||
| P/OCF | 21.86 | ||
| P/B | 1.38 | ||
| P/tB | 1.4 | ||
| EV/EBITDA | 13.99 |
EPS(TTM)1.89
EY9.34%
EPS(NY)2.21
Fwd EY10.95%
FCF(TTM)0.77
FCFY3.82%
OCF(TTM)0.93
OCFY4.57%
SpS11.73
BVpS14.64
TBVpS14.43
PEG (NY)0.42
PEG (5Y)0.36
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.24% | ||
| ROE | 13.28% | ||
| ROCE | 7.34% | ||
| ROIC | 4.92% | ||
| ROICexc | 4.96% | ||
| ROICexgc | 5.05% | ||
| OM | 87.49% | ||
| PM (TTM) | 16.58% | ||
| GM | 90.91% | ||
| FCFM | 6.59% |
ROA(3y)0.92%
ROA(5y)0.41%
ROE(3y)8.78%
ROE(5y)5.52%
ROIC(3y)4.33%
ROIC(5y)4.4%
ROICexc(3y)4.38%
ROICexc(5y)4.45%
ROICexgc(3y)4.43%
ROICexgc(5y)4.49%
ROCE(3y)6.08%
ROCE(5y)6.11%
ROICexcg growth 3Y0.18%
ROICexcg growth 5Y2.82%
ROICexc growth 3Y-0.02%
ROICexc growth 5Y2.62%
OM growth 3Y4.68%
OM growth 5Y2.39%
PM growth 3YN/A
PM growth 5Y21.75%
GM growth 3Y-1.82%
GM growth 5Y-1.03%
F-Score5
Asset Turnover0.07
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 9.44 | ||
| Debt/FCF | 178.78 | ||
| Debt/EBITDA | 13.43 | ||
| Cap/Depr | 608.17% | ||
| Cap/Sales | 1.3% | ||
| Interest Coverage | 1.48 | ||
| Cash Conversion | 9% | ||
| Profit Quality | 39.73% | ||
| Current Ratio | 0.13 | ||
| Quick Ratio | 0.13 | ||
| Altman-Z | 0.31 |
F-Score5
WACC5.68%
ROIC/WACC0.87
Cap/Depr(3y)125.3%
Cap/Depr(5y)129.29%
Cap/Sales(3y)0.42%
Cap/Sales(5y)0.68%
Profit Quality(3y)172.65%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)40%
EPS 3Y25.45%
EPS 5Y30.08%
EPS Q2Q%27.03%
EPS Next Y25.59%
EPS Next 2Y19.91%
EPS Next 3Y13%
EPS Next 5YN/A
Revenue 1Y (TTM)30.61%
Revenue growth 3Y22.18%
Revenue growth 5Y20.44%
Sales Q2Q%25.32%
Revenue Next Year5.1%
Revenue Next 2Y7.96%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y30.66%
EBIT growth 3Y27.9%
EBIT growth 5Y23.31%
EBIT Next Year32.89%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y6.39%
FCF growth 3Y-3.01%
FCF growth 5YN/A
OCF growth 1Y14.7%
OCF growth 3Y-3.82%
OCF growth 5YN/A