Velocity Financial, Inc. (VEL) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

+2634.7%

$444.25

vs $16.25 price

Levered DCF

$482.75

After debt service

Piotroski score

6 / 9

Average

Altman Z-score

0.39

Distress zone

Rating

B+

Overall 3 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
P/E	7.39×	9.45×	10.76×	9.75×	15.22×	-4.02×	15.71×	20.78×
P/B	1.14×	1.24×	1.28×	0.82×	0.92×	0.57×	10.04×	0.97×
P/S	1.07×	1.32×	4.21×	1.24×	1.72×	0.75×	10.04×	1.31×
EV / EBITDA	14.1×	55.37×	0×	75.84×	62.84×	71.99×	126.24×	81.66×
Gross margin	95.3%	43.6%	100.0%	36.2%	41.7%	36.7%	34.8%	37.4%
Operating margin	71.6%	20.0%	58.3%	17.9%	21.9%	13.9%	16.6%	15.8%
Net margin	14.7%	14.2%	39.7%	13.0%	16.1%	10.7%	11.3%	6.3%
Current ratio	0.63×	0.43×	0.36×	0.34×	0.32×	0.73×	0.19×	2.57×
Debt / equity	9.72×	9.4×	8.86×	8.7×	6.96×	7.88×	13.12×	9.46×
Interest coverage	1.4×	0.39×	0.38×	0.28×	0.38×	0.23×	0.26×	0.25×
Dividend yield	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%
Payout ratio	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%

Key metrics by fiscal year

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
Return on equity	15.6%	13.2%	12.1%	8.5%	8.6%	8.1%	11.3%	4.7%
Return on invested capital	5.1%	1.3%	1.3%	0.9%	53.4%	0.9%	0.8%	0.4%
Return on assets	1.4%	1.2%	1.2%	0.9%	1.0%	0.8%	0.8%	0.4%
Free cash flow yield	2.3%	5.9%	11.0%	15.7%	18.3%	42.6%	-7.0%	-46.7%
Earnings yield	13.7%	10.7%	9.4%	10.5%	9.4%	14.2%	1.1%	4.8%
Enterprise value	$7.2B	$5.4B	$4.4B	$3.5B	$2.7B	$1.8B	$3.5B	$1.7B
Net debt / EBITDA	12.61×	48.88×	0×	69.25×	55.44×	67.1×	71.17×	73.98×
Cash conversion cycle (days)	-1,813	-77	335	-71	-139	-30	-44	30