On Monday, BTIG adjusted its price target for Velocity Financial (NYSE:VEL), a real estate finance company, raising it to $18.00 from the previous $17.00. The firm has maintained a Buy rating on the stock. This decision follows a week in which Velocity Financial saw a 3.1% increase in its stock performance, attributed to a robust earnings per share (EPS) report.
The analyst at BTIG noted that among the alternative lending companies they cover, Velocity Financial stands out due to its strong loan production volumes and growing fee income. This growth in fee income is partly due to the company's acquisition of a HUD license, which allows it to expand its service offerings. The analyst believes that these factors will continue to contribute to the company's success.
The new price target of $18.00 is based on a 1.07 times multiple to the estimated fair value of Velocity Financial's portfolio. This valuation reflects the firm's confidence in the company's ability to sustain its performance and capitalize on its strategic initiatives.
Velocity Financial specializes in providing loans to residential investors and small business owners, with a focus on property loans. The company's recent earnings strength and strategic acquisitions have positioned it favorably within the alternative lending sector.
InvestingPro Insights
As Velocity Financial (NYSE:VEL) garners attention with its revised price target from BTIG, InvestingPro data provides a deeper dive into the company's financial health and market performance. With a market capitalization of $541.98 million and a striking P/E ratio of 10.49 for the last twelve months as of Q4 2023, the company's valuation metrics suggest it is trading at a low price relative to its near-term earnings growth potential. This aligns with the InvestingPro Tip that highlights Velocity Financial's trading at a low P/E ratio compared to its earnings growth, indicating a potentially undervalued stock.
The company's impressive revenue growth of 47.83% over the last twelve months and a gross profit margin of 76.41% reflect its operational efficiency and ability to scale effectively. Furthermore, Velocity Financial's stock has experienced a significant 99.88% return over the last year, which is a testament to its strong market performance and aligns with another InvestingPro Tip about the company's high return over the past year.
With analysts predicting profitability for the current year and the company having been profitable over the last twelve months, Velocity Financial seems well-positioned for continued success. For investors seeking further insights and tips, InvestingPro offers additional analysis, with more tips available at https://www.investing.com/pro/VEL. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and enrich your investment strategy with expert insights.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.