Overview

• U.S. business purpose lender's Q4 revenue rose 44.6% yr/yr; core diluted EPS beat expectations

• Quarter driven by record loan production and gain on sale of nonperforming loans

• Nonperforming loans as percent of portfolio fell to 8.5% from 10.7% yr/yr

Outlook

• Velocity Financial did not provide specific guidance for the current qtr or full yr

Result Drivers

• RECORD LOAN PRODUCTION - Q4 production volume reached a record, driven mainly by demand for Investor 1-4 rental loans, which rose 40.6% yr/yr

• NPL SALE GAINS - Net income benefited from a $13.4 mln tax-effected gain on sale of nonperforming loans

Company press release: ID:nBw57W7Wda

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", no "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the consumer lending peer group is "buy"

• Wall Street's median 12-month price target for Velocity Financial Inc is $22.00, about 21.1% above its March 10 closing price of $18.16

• The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 8 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)