VELOCITY FINANCIAL INC (VEL)
US92262D1019 - Common Stock
Overall VEL gets a fundamental rating of 5 out of 10. We evaluated VEL against 102 industry peers in the Financial Services industry. VEL has an excellent profitability rating, but there are concerns on its financial health. VEL is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one!
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 4 of the past 5 years.
1.2 Ratios
VEL has a Return On Assets (1.17%) which is in line with its industry peers.
VEL's Return On Equity of 11.89% is in line compared to the rest of the industry. VEL outperforms 55.88% of its industry peers.
VEL has a better Return On Invested Capital (4.73%) than 72.55% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for VEL is below the industry average of 7.98%.
The 3 year average ROIC (4.33%) for VEL is below the current ROIC(4.73%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.17% | ||
| ROE | 11.89% | ||
| ROIC | 4.73% |
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
With a decent Profit Margin value of 16.15%, VEL is doing good in the industry, outperforming 70.59% of the companies in the same industry.
VEL's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 86.54%, VEL belongs to the best of the industry, outperforming 98.04% of the companies in the same industry.
VEL's Operating Margin has improved in the last couple of years.
VEL's Gross Margin of 90.42% is amongst the best of the industry. VEL outperforms 93.14% 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 | 86.54% | ||
| PM (TTM) | 16.15% | ||
| GM | 90.42% |
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
VEL has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, VEL has more shares outstanding
VEL has more shares outstanding than it did 5 years ago.
VEL has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.30, we must say that VEL is in the distress zone and has some risk of bankruptcy.
VEL has a Altman-Z score (0.30) which is in line with its industry peers.
VEL has a debt to FCF ratio of 78.97. This is a negative value and a sign of low solvency as VEL would need 78.97 years to pay back of all of its debts.
VEL has a worse Debt to FCF ratio (78.97) than 61.76% of its industry peers.
VEL has a Debt/Equity ratio of 8.86. This is a high value indicating a heavy dependency on external financing.
VEL has a Debt to Equity ratio of 8.86. This is amonst the worse of the industry: VEL underperforms 89.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 8.86 | ||
| Debt/FCF | 78.97 | ||
| Altman-Z | 0.3 |
ROIC/WACC0.86
WACC5.47%
2.3 Liquidity
A Current Ratio of 0.15 indicates that VEL may have some problems paying its short term obligations.
VEL has a Current ratio of 0.15. This is in the lower half of the industry: VEL underperforms 78.43% of its industry peers.
A Quick Ratio of 0.15 indicates that VEL may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.15, VEL is doing worse than 78.43% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.15 | ||
| Quick Ratio | 0.15 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 25.20% over the past year.
The Earnings Per Share has been growing by 30.08% on average over the past years. This is a very strong growth
Looking at the last year, VEL shows a very strong growth in Revenue. The Revenue has grown by 28.92%.
The Revenue has been growing by 20.44% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)25.2%
EPS 3Y25.45%
EPS 5Y30.08%
EPS growth Q2Q70.37%
Revenue 1Y (TTM)28.92%
Revenue growth 3Y22.18%
Revenue growth 5Y20.44%
Revenue growth Q2Q32.92%
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 10.45% on average per year.
VEL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.95% yearly.
EPS Next Y4.94%
EPS Next 2Y10.45%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-2.26%
Revenue Next 2Y4.95%
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
A Price/Earnings ratio of 11.60 indicates a reasonable valuation of VEL.
69.61% of the companies in the same industry are more expensive than VEL, based on the Price/Earnings ratio.
VEL's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.91.
Based on the Price/Forward Earnings ratio of 11.06, the valuation of VEL can be described as reasonable.
64.71% of the companies in the same industry are more expensive than VEL, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 20.51. VEL is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.6 | ||
| Fwd PE | 11.06 |
4.2 Price Multiples
65.69% of the companies in the same industry are more expensive than VEL, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of VEL indicates a somewhat cheap valuation: VEL is cheaper than 69.61% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.12 | ||
| EV/EBITDA | 14.67 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
VEL has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.35
PEG (5Y)0.39
EPS Next 2Y10.45%
EPS Next 3YN/A
5. Dividend
5.1 Amount
No dividends for VEL!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
VELOCITY FINANCIAL INC
NYSE:VEL (5/15/2024, 7:15:10 PM)
After market: 17.87 0 (0%)17.87
-0.14 (-0.78%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap589.53M
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.6 | ||
| Fwd PE | 11.06 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.35
PEG (5Y)0.39
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.17% | ||
| ROE | 11.89% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 86.54% | ||
| PM (TTM) | 16.15% | ||
| GM | 90.42% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.07
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 8.86 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.15 | ||
| Quick Ratio | 0.15 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)25.2%
EPS 3Y25.45%
EPS 5Y
EPS growth Q2Q
EPS Next Y4.94%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)28.92%
Revenue growth 3Y22.18%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y