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
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Revenue | Beat | $85.84 mln | $41 mln (1 Analyst) |
Q2 Core EPS | Beat | $0.73 | $0.53 (3 Analysts) |
Q2 EPS | $0.69 | ||
Q2 Core Net Income | Beat | $27.47 mln | $20.20 mln (3 Analysts) |
Q2 Net Income | $26 mln | ||
Q2 Pretax Income | $33.92 mln |
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.)
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.