VELOCITY FINANCIAL INC (VEL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:VEL - US92262D1019 - Common Stock
20.76 USD
+1.27 (+6.52%)
20.76 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. While VEL belongs to the best of the industry regarding profitability, 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
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.
VEL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
VEL has a Return On Assets of 1.29%. This is comparable to the rest of the industry: VEL outperforms 53.06% of its industry peers.
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.
The Average Return On Invested Capital over the past 3 years 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
With an excellent Profit Margin value of 20.70%, VEL belongs to the best of the industry, outperforming 80.61% of the companies in the same industry.
In the last couple of years the Profit Margin of VEL has grown nicely.
With an excellent Operating Margin value of 87.86%, VEL belongs to the best 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 (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
VEL has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
VEL has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, VEL has more shares outstanding
The debt/assets ratio for VEL is higher 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 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.
The Debt to FCF ratio of VEL (110.82) is worse than 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's Debt to Equity ratio of 9.70 is on the low side compared to the rest of the industry. VEL is outperformed by 84.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 9.7 | ||
| Debt/FCF | 110.82 | ||
| Altman-Z | 0.31 |
ROIC/WACC0.73
WACC5.59%
2.3 Liquidity
A Current Ratio of 0.29 indicates that VEL may have some problems paying its short term obligations.
VEL has a worse Current ratio (0.29) than 65.31% of its industry peers.
VEL has a Quick 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 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.
Measured over the past years, VEL shows a quite strong growth in Earnings Per Share. The EPS has been growing by 15.62% on average per year.
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
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 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.
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
The Price/Earnings ratio is 8.08, which indicates a very decent valuation of VEL.
Compared to the rest of the industry, the Price/Earnings ratio of VEL indicates a somewhat cheap valuation: VEL is cheaper than 78.57% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.51, VEL is valued rather cheaply.
With a Price/Forward Earnings ratio of 8.01, the valuation of VEL can be described as very reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of VEL indicates a somewhat cheap valuation: VEL is cheaper than 68.37% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.13, VEL is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.08 | ||
| Fwd PE | 8.01 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as VEL.
VEL's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. VEL is cheaper than 65.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.55 | ||
| EV/EBITDA | 17.17 |
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.
VEL has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)0.3
PEG (5Y)0.52
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% |
20.76
+1.27 (+6.52%)
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 Cap807.56M
Revenue(TTM)433.35M
Net Income(TTM)89.72M
Analysts77.14
Price Target22.1 (6.45%)
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)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 | 8.08 | ||
| Fwd PE | 8.01 | ||
| P/S | 1.86 | ||
| P/FCF | 14.55 | ||
| P/OCF | 14.44 | ||
| P/B | 1.27 | ||
| P/tB | 1.29 | ||
| EV/EBITDA | 17.17 |
EPS(TTM)2.57
EY12.38%
EPS(NY)2.59
Fwd EY12.49%
FCF(TTM)1.43
FCFY6.87%
OCF(TTM)1.44
OCFY6.92%
SpS11.14
BVpS16.3
TBVpS16.13
PEG (NY)0.3
PEG (5Y)0.52
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
WACC5.59%
ROIC/WACC0.73
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 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 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.