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Velocity Financial Q3 core EPS beats on strong loan demand

By Reuters News


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

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Revenue

$102.15 mln

Q3 Core EPS

Beat

$0.76

$0.71 (3 Analysts)

Q3 EPS

$0.67

Q3 Core Net Income

$30.04 mln

Q3 Net Income

$26.42 mln

Q3 Pretax Income

$38.28 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 "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

  • Nov 3 - Oportun Financial's Q3 revenue beats estimates on higher originations in lower-risk segments

  • Nov 3 - Canada's Propel Holdings Q3 revenue beats on new customer growth

  • Nov 3 - Redwood Trust Q3 loss widens


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(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.)

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