VELOCITY FINANCIAL INC (VEL) Stock Fundamental Analysis
USA - NYSE:VEL - US92262D1019 - Common Stock
18.02 USD
+0.01 (+0.06%)
18.02 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to VEL. VEL was compared to 100 industry peers in the Financial Services industry. VEL has an excellent profitability rating, but there are concerns on its financial health. VEL is growing strongly while it also seems undervalued. This is an interesting combination
1. Profitability
1.1 Basic Checks
In the past year VEL was profitable.
In the past year VEL had a positive cash flow from operations.
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 52.00% of its industry peers.
VEL's Return On Equity of 13.43% is fine compared to the rest of the industry. VEL outperforms 72.00% of its industry peers.
VEL's Return On Invested Capital of 4.93% is fine compared to the rest of the industry. VEL outperforms 65.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for VEL is below the industry average of 7.66%.
The last Return On Invested Capital (4.93%) for VEL is above the 3 year average (4.55%), which is a sign of increasing profitability.
| 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
The Profit Margin of VEL (16.49%) is better than 68.00% of its industry peers.
In the last couple of years the Profit Margin of VEL has grown nicely.
The Operating Margin of VEL (88.39%) is better 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 92.00% 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so VEL is destroying value.
VEL has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, VEL has more shares outstanding
Compared to 1 year ago, VEL has a worse debt to assets ratio.
2.2 Solvency
VEL has an Altman-Z score of 0.35. This is a bad value and indicates that VEL is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of VEL (0.35) is comparable to the rest of the industry.
VEL has a debt to FCF ratio of 224.95. This is a negative value and a sign of low solvency as VEL would need 224.95 years to pay back of all of its debts.
VEL has a Debt to FCF ratio of 224.95. This is in the lower half of the industry: VEL underperforms 60.00% 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.
With a Debt to Equity ratio value of 9.55, VEL is not doing good in the industry: 86.00% 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/WACC0.86
WACC5.76%
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 70.00% of its industry peers.
A Quick Ratio of 0.25 indicates that VEL may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.25, VEL is doing worse than 70.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.25 | ||
| Quick Ratio | 0.25 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 31.28% over the past year.
VEL shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.62% yearly.
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
The Earnings Per Share is expected to grow by 11.68% on average over the next years. This is quite good.
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
A Price/Earnings ratio of 7.67 indicates a rather cheap valuation of VEL.
Based on the Price/Earnings ratio, VEL is valued cheaply inside the industry as 84.00% of the companies are valued more expensively.
VEL's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.86.
A Price/Forward Earnings ratio of 7.14 indicates a rather cheap valuation of VEL.
Based on the Price/Forward Earnings ratio, VEL is valued a bit cheaper than 75.00% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.32. VEL is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.67 | ||
| Fwd PE | 7.14 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of VEL is on the same level as its industry peers.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of VEL is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.29 | ||
| EV/EBITDA | 13.83 |
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.
The decent profitability rating of VEL may justify a higher PE ratio.
PEG (NY)0.45
PEG (5Y)0.49
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 |
18.02
+0.01 (+0.06%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners62.62%
Inst Owner Change0%
Ins Owners2.91%
Ins Owner Change12.05%
Market Cap692.69M
Analysts77.14
Price Target21.76 (20.75%)
Short Float %1.47%
Short Ratio3.63
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)9.01%
EPS NQ rev (3m)11.35%
EPS NY rev (1m)0%
EPS NY rev (3m)5.7%
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 | 7.67 | ||
| Fwd PE | 7.14 | ||
| P/S | 1.42 | ||
| P/FCF | 27.29 | ||
| P/OCF | 25.75 | ||
| P/B | 1.16 | ||
| P/tB | 1.17 | ||
| EV/EBITDA | 13.83 |
EPS(TTM)2.35
EY13.04%
EPS(NY)2.53
Fwd EY14.01%
FCF(TTM)0.66
FCFY3.66%
OCF(TTM)0.7
OCFY3.88%
SpS12.67
BVpS15.55
TBVpS15.38
PEG (NY)0.45
PEG (5Y)0.49
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
WACC5.76%
ROIC/WACC0.86
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 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