Velocity Financial Q3 core EPS beats on strong loan demand

Overview

• U.S. business purpose lender's Q3 core EPS beat analyst expectations, net income rose yr/yr

• Company says results driven by consistent net interest margin and strong loan production

• Nonperforming loans as share of portfolio rose to 10.1% from 9.8% yr/yr

Outlook

• Company says financing demand remains strong, with an expanding pipeline of new applications

• Velocity expects to sustain profitable market share growth over the long term

Result Drivers

• STRONG LOAN DEMAND - Co said robust financing demand and a growing pipeline supported higher loan production

• NET INTEREST MARGIN - Co attributed results to consistent portfolio net interest margin driven by rate discipline on new loans

• ORIGINATION FEES - Higher origination volumes and related fee income contributed to other operating income growth

Company press release:

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 39.6% above its November 3 closing price of $15.76

• The stock recently traded at 5 times the next 12-month earnings vs. a P/E of 6 three months ago

Reuters Recommended Reads

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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.)