Overview

• Velocity Financial Q2 revenue beats analyst expectations, driven by record loan production

• Core EPS for Q2 exceeds analyst estimates, reflecting strong portfolio earnings

• Net interest margin rises due to higher cash interest from resolved NPLs

Outlook

• Velocity Financial confident in sustaining profitable market share growth

Result Drivers

• RECORD LOAN PRODUCTION - Driven by demand for traditional commercial loans and investor 1-4 rental loans, increasing 93.1% and 53.4% from 2Q24

• PORTFOLIO EARNINGS - Strong portfolio earnings and record production volume contributed to increased net income and core net income

• NIM IMPROVEMENT - Higher cash interest from resolved nonperforming loans boosted net interest margin, supported by rate discipline on new loan production

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 "hold."

• Wall Street's median 12-month price target for Velocity Financial Inc is $21.00, about 21.4% above its August 6 closing price of $16.50

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

Press Release: ID:nBw8DZGtta

(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.)