VELOCITY FINANCIAL INC (VEL) Stock Fundamental Analysis
USA - NYSE:VEL - US92262D1019 - Common Stock
18.35 USD
-0.08 (-0.43%)
18.35 USD
0 (0%)
Overall VEL gets a fundamental rating of 5 out of 10. We evaluated VEL against 99 industry peers in the Financial Services industry. VEL scores excellent on profitability, but 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.
VEL had positive earnings in 4 of the past 5 years.
Each year in the past 5 years VEL had a positive operating cash flow.
1.2 Ratios
VEL has a Return On Assets of 1.24%. This is comparable to the rest of the industry: VEL outperforms 52.53% of its industry peers.
With a decent Return On Equity value of 13.43%, VEL is doing good in the industry, outperforming 69.70% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 4.93%, VEL is in the better half of the industry, outperforming 65.66% 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 8.14%.
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's Profit Margin of 16.49% is fine compared to the rest of the industry. VEL outperforms 66.67% of its industry peers.
In the last couple of years the Profit Margin of VEL has grown nicely.
VEL has a better Operating Margin (88.39%) than 100.00% of its industry peers.
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.
VEL has more shares outstanding than it did 1 year ago.
The number of shares outstanding for VEL has been increased compared to 5 years ago.
The debt/assets ratio for VEL is higher compared to a year ago.
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.
The Altman-Z score of VEL (0.35) is comparable to the rest of the 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.
With a Debt to FCF ratio value of 224.95, VEL is not doing good in the industry: 62.63% of the companies in the same industry are doing better.
A Debt/Equity ratio of 9.55 is on the high side and indicates that VEL has dependencies on debt financing.
With a Debt to Equity ratio value of 9.55, VEL is not doing good in the industry: 84.85% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 9.55 | ||
| Debt/FCF | 224.95 | ||
| Altman-Z | 0.35 |
ROIC/WACC0.92
WACC5.36%
2.3 Liquidity
A Current Ratio of 0.25 indicates that VEL may have some problems paying its short term obligations.
With a Current ratio value of 0.25, VEL is not doing good in the industry: 68.69% of the companies in the same industry are doing better.
A Quick Ratio of 0.25 indicates that VEL may have some problems paying its short term obligations.
With a Quick ratio value of 0.25, VEL is not doing good in the industry: 68.69% of the companies in the same industry are doing better.
| 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 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.
Looking at the last year, VEL shows a very strong growth in Revenue. The Revenue has grown by 30.65%.
The Revenue has been growing by 20.82% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)35.98%
EPS 3Y27.91%
EPS 5Y15.62%
EPS Q2Q%46.81%
Revenue 1Y (TTM)30.65%
Revenue growth 3Y29.96%
Revenue growth 5Y20.82%
Sales Q2Q%-12.13%
3.2 Future
VEL is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.68% yearly.
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 Y24.38%
EPS Next 2Y12.64%
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.
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
Based on the Price/Earnings ratio of 7.14, the valuation of VEL can be described as very cheap.
Based on the Price/Earnings ratio, VEL is valued cheaper than 83.84% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 25.45. VEL is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 7.12, which indicates a rather cheap valuation of VEL.
VEL's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. VEL is cheaper than 71.72% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of VEL to the average of the S&P500 Index (34.46), we can say VEL is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.14 | ||
| Fwd PE | 7.12 |
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 is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.79 | ||
| EV/EBITDA | 13.93 |
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.
PEG (NY)0.29
PEG (5Y)0.46
EPS Next 2Y12.64%
EPS Next 3Y11.68%
5. Dividend
5.1 Amount
No dividends for VEL!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
18.35
-0.08 (-0.43%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners62.62%
Inst Owner Change0.68%
Ins Owners2.91%
Ins Owner Change0.08%
Market Cap705.37M
Revenue(TTM)416.78M
Net Income(TTM)80.31M
Analysts77.14
Price Target21.76 (18.58%)
Short Float %1.41%
Short Ratio4.18
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)0%
EPS NQ rev (3m)6.76%
EPS NY rev (1m)6.38%
EPS NY rev (3m)12.44%
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 | 7.14 | ||
| Fwd PE | 7.12 | ||
| P/S | 1.45 | ||
| P/FCF | 27.79 | ||
| P/OCF | 26.22 | ||
| P/B | 1.18 | ||
| P/tB | 1.19 | ||
| EV/EBITDA | 13.93 |
EPS(TTM)2.57
EY14.01%
EPS(NY)2.58
Fwd EY14.04%
FCF(TTM)0.66
FCFY3.6%
OCF(TTM)0.7
OCFY3.81%
SpS12.67
BVpS15.55
TBVpS15.38
PEG (NY)0.29
PEG (5Y)0.46
Graham Number29.99
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 | 13.24 | ||
| Cap/Depr | 218.39% | ||
| Cap/Sales | 0.31% | ||
| Interest Coverage | 1.46 | ||
| Cash Conversion | 6.24% | ||
| Profit Quality | 31.6% | ||
| Current Ratio | 0.25 | ||
| Quick Ratio | 0.25 | ||
| Altman-Z | 0.35 |
F-Score4
WACC5.36%
ROIC/WACC0.92
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 Y24.38%
EPS Next 2Y12.64%
EPS Next 3Y11.68%
EPS Next 5YN/A
Revenue 1Y (TTM)30.65%
Revenue growth 3Y29.96%
Revenue growth 5Y20.82%
Sales Q2Q%-12.13%
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 7.14 and the Price/Book (PB) ratio is 1.18.
What is the financial health of VELOCITY FINANCIAL INC (VEL) stock?
The financial health rating of VELOCITY FINANCIAL INC (VEL) is 0 / 10.