VELOCITY FINANCIAL INC (VEL) Stock Fundamental Analysis
USA - NYSE:VEL - US92262D1019 - Common Stock
18.67 USD
-0.05 (-0.27%)
Overall VEL gets a fundamental rating of 5 out of 10. We evaluated VEL against 101 industry peers in the Financial Services industry. While VEL has a great profitability rating, there are quite some 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
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.
In the past 5 years VEL always reported a positive cash flow from operatings.
1.2 Ratios
VEL has a Return On Assets of 1.24%. This is comparable to the rest of the industry: VEL outperforms 52.48% of its industry peers.
Looking at the Return On Equity, with a value of 13.43%, VEL is in the better half of the industry, outperforming 72.28% of the companies in the same industry.
With a decent Return On Invested Capital value of 4.93%, VEL is doing good in the industry, outperforming 65.35% of the companies in the same industry.
VEL had an Average Return On Invested Capital over the past 3 years of 4.55%. This is below the industry average of 7.64%.
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 68.32% of its industry peers.
VEL's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 88.39%, VEL belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Operating Margin of VEL has grown nicely.
Looking at the Gross Margin, with a value of 88.82%, VEL belongs to the top of the industry, outperforming 92.08% of the companies in the same industry.
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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
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.
With a Altman-Z score value of 0.35, VEL perfoms like the industry average, outperforming 47.52% of the companies in the same 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 (224.95) which is comparable to the rest of the industry.
VEL has a Debt/Equity ratio of 9.55. This is a high value indicating a heavy dependency on external financing.
VEL has a Debt to Equity ratio of 9.55. This is amonst the worse of the industry: VEL underperforms 86.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 9.55 | ||
| Debt/FCF | 224.95 | ||
| Altman-Z | 0.35 |
ROIC/WACC0.85
WACC5.81%
2.3 Liquidity
VEL has a Current Ratio of 0.25. 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's Current ratio of 0.25 is on the low side compared to the rest of the industry. VEL is outperformed by 68.32% of its industry peers.
A Quick Ratio of 0.25 indicates that VEL may have some problems paying its short term obligations.
The Quick ratio of VEL (0.25) is worse than 68.32% of its industry peers.
| 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 31.28%, which is quite impressive.
The Earnings Per Share has been growing by 15.62% on average over the past years. This is quite good.
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
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.
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 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
With a Price/Earnings ratio of 7.94, the valuation of VEL can be described as very cheap.
Based on the Price/Earnings ratio, VEL is valued cheaper than 83.17% of the companies in the same industry.
VEL is valuated cheaply when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 7.39, 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 77.23% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.73, VEL is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.94 | ||
| Fwd PE | 7.39 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of VEL indicates a somewhat cheap valuation: VEL is cheaper than 61.39% of the companies listed in the same industry.
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 | 28.28 | ||
| EV/EBITDA | 13.9 |
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.
VEL has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)0.47
PEG (5Y)0.51
EPS Next 2Y11.53%
EPS Next 3Y11.68%
5. Dividend
5.1 Amount
No dividends for VEL!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NYSE:VEL (9/15/2025, 10:00:01 AM)
18.67
-0.05 (-0.27%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners63.54%
Inst Owner Change6.69%
Ins Owners3.06%
Ins Owner Change12.05%
Market Cap717.67M
Analysts77.14
Price Target21.76 (16.55%)
Short Float %1.52%
Short Ratio3.39
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)-2.06%
EPS NQ rev (3m)4.06%
EPS NY rev (1m)5.7%
EPS NY rev (3m)5.15%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)8.73%
Revenue NY rev (3m)8.73%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.94 | ||
| Fwd PE | 7.39 | ||
| P/S | 1.47 | ||
| P/FCF | 28.28 | ||
| P/OCF | 26.68 | ||
| P/B | 1.2 | ||
| P/tB | 1.21 | ||
| EV/EBITDA | 13.9 |
EPS(TTM)2.35
EY12.59%
EPS(NY)2.53
Fwd EY13.52%
FCF(TTM)0.66
FCFY3.54%
OCF(TTM)0.7
OCFY3.75%
SpS12.67
BVpS15.55
TBVpS15.38
PEG (NY)0.47
PEG (5Y)0.51
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
WACC5.81%
ROIC/WACC0.85
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 Year20.18%
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