Velocity Financial, Inc. (VEL) stock analysis

VELNYSEFinance ServicesFiscal year ends December 31

Financials through Q3 FY2026, quarter ended Sep 30, 2026Last filing: 10-Q on Nov 6, 2026Score 7/3032% below fair value

$16.37−0.34 (-2.03%)

Close on Nov 11, 2026Market cap $646.31MP/E 5.9Yield –

StockData Score

Prices as of Nov 11, 2026How the score works

Weak7 of 30 checks passed

Velocity Financial passes 7 of the 30 checks behind our score; 18 could not be run for lack of data and count as not passed. Each dot in the shape is one check — hover it for the numbers.

Valuation: 4/6
Growth: 1/6
Past performance: 2/6
Financial health: 0/6
Dividend: 0/6

What stands out

Margin of safety over 20%
The price is 31.6% below fair value, more than the 20% cushion we look for.
Trading below fair value
The share price of $16.37 is below our fair value estimate of $23.93.
Earnings grew over 5 years
Net income grew 42.7% a year on average over the last five fiscal years.
EPS growing 10%+ a year
Diluted EPS grew 43.0% a year over the last three fiscal years.

What to watch

Return on equity under 15%
Return on equity was 15.7% over the last twelve months and averaged 12.9% over five years; we look for 15% on both.
Earnings growth not accelerating
Net income grew 19.7% over the last twelve months, against a 5-year average of 42.7% a year.
Elevated bankruptcy risk
The Altman Z-score is 0.12; above 3 is the safe zone and below 1.8 the distress zone.
P/B above the industry
Velocity Financial's price-to-book of 0.86 is above the Finance services median of 0.83.

Valuation4/6

P/E below its 5-year median
Velocity Financial's P/E of 5.9 is below its own 5-year median of 9.7.
P/E below the industry
Velocity Financial's P/E of 5.9 is below the Finance services median of 11.8.
EV/EBITDA against its history
Needs positive EBITDA and price history.
P/B above the industry
Velocity Financial's price-to-book of 0.86 is above the Finance services median of 0.83.
Trading below fair value
The share price of $16.37 is below our fair value estimate of $23.93.
Margin of safety over 20%
The price is 31.6% below fair value, more than the 20% cushion we look for.

Growth1/6

Revenue growth over 3 years
Needs three years of positive revenue.
EPS growing 10%+ a year
Diluted EPS grew 43.0% a year over the last three fiscal years.
Earnings growth not accelerating
Net income grew 19.7% over the last twelve months, against a 5-year average of 42.7% a year.
Growth against the industry
Needs revenue for this year and last.
Company guidance
No outlook found in earnings releases from the last twelve months.
Gross margin trend
This company does not report gross profit.

Past performance2/6

Return on equity under 15%
Return on equity was 15.7% over the last twelve months and averaged 12.9% over five years; we look for 15% on both.
Return on invested capital
Needs operating income and invested capital.
Return on equity above the industry
Velocity Financial's return on equity of 15.7% is above the Finance services median of -33.5%.
Earnings grew over 5 years
Net income grew 42.7% a year on average over the last five fiscal years.
Net margin against its history
Needs five years of revenue and net income.
Net margin against the industry
Needs revenue and net income.

Financial health0/6

Debt level
Needs debt and equity figures.
Debt trend
Needs a balance sheet from five years ago with positive equity.
Debt coverage
Needs operating cash flow.
Interest coverage
Interest expense is not reported separately.
Short-term liquidity
The balance sheet is not split into current and non-current items.
Elevated bankruptcy risk
The Altman Z-score is 0.12; above 3 is the safe zone and below 1.8 the distress zone.

Dividend0/6

No dividend
Velocity Financial has not paid a dividend in the last twelve months.
Yield against Treasuries
No dividend.
Yield against the market
No dividend.
Dividend stability
No dividend.
Earnings cover
No dividend.
Cash-flow cover
No dividend.

Scores of similar companies

Fair value

How we estimate it

Our estimate per share

$23.93

The share price is 32% below this estimate.

20%+ below

Near fair value

20%+ above

$16.37Price$23.93Fair value

Method	Multiple used	Own 5Y median	Industry median	Value per share	Weight
P/E	10.8×	9.7×	11.8×	$29.83	62%
P/B	1.0×	1.1×	0.8×	$18.59	15%
Earnings power	7.5% cost of equity	–	–	$11.78	23%
Fair value				$23.93	100%

Valuation over time

Using the earnings and balance sheet published at each date, not today's.

P/E at month end
Own 5-year median 9.7
Finance services median 11.8

An estimate from reported numbers and market multiples, not a price target or investment advice. It can be far off for companies whose profits are about to change sharply.

Market risk

From the past year of daily prices.

Liquidity

Medium risk

Average value traded per day: $2.71M
Value traded per 1% price move: $1.79M

Downside

Medium risk

Typical loss in a bad month: 17.9%
Volatility (annualized): 27%
Sharpe ratio, 1 year: -0.57
Beta to the S&P 500 (5Y): 0.51

Typical bad-month loss, week by week

Margins need revenue and profit figures

This company does not report the lines needed to calculate margins.

Per year	1 year	3 years	5 years	10 years
Net income	+53.5%	+48.3%	+42.7%	–
EPS, diluted	+44.0%	+43.0%	–	–
Free cash flow	-52.3%	-28.2%	-19.9%	–

Measure	FY2017	FY2020	FY2025
Return on equity	–	9.5%	17.7%
Return on assets	–	0.8%	1.6%
Diluted shares	–	20M	38M

See a number that looks wrong?