Overview

• Real estate loan provider's preliminary Q4 net income rises 70% yr/yr

• Preliminary Q4 EPS grows 56% yr/yr

• Company's preliminary Q4 loan originations increase 13% yr/yr

Outlook

• Velocity Financial plans to leverage 2025 achievements to improve efficiency in 2026

• Company notes preliminary results subject to final adjustments

Result Drivers

• LOAN ORIGINATIONS - Velocity reported a 13% increase in Q4 loan originations, contributing to higher net income and EPS

• MARKET SHARE EXPANSION - CEO Chris Farrar attributed success to growing market share in the underserved investor loan market

• NONPERFORMING LOANS - Reduction in nonperforming loans contributed to financial performance, with rates dropping from 10.7% to between 8.5% and 8.6%

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 13.5% above its January 23 closing price of $19.39

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

Press Release: ID:nBwbl6NwJa

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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.)