VEL Earnings Prediction
The chart below shows how VEL performed 10 days before and after its earnings report, based on data from the past quarters. Typically, VEL sees a -1.97% change in stock price 10 days leading up to the earnings, and a +3.61% change 10 days following the report. On the earnings day itself, the stock moves by -0.42%. This data can give you a slight idea of what to expect for the next quarter's release.
VEL Key Earning Data
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VEL Earnings Analysis
Velocity Financial Inc Corporation (VEL.N) Earnings Conference Call
Positive
Earnings Surprise Report: Velocity Financial, Inc. beats earnings expectations with reported EPS of $0.60, exceeding expectations of $0.48.
Strong Demand Surge: The company reported a 64% increase in originations, indicating strong demand from borrowers.
Net Revenue Surge: Net revenue increased by 37%, showcasing significant growth in the company's financial performance.
Strong Pretax ROE Performance: Q4 pretax return on equity (ROE) was an impressive 26.8%, reflecting effective management and profitability.
Loan Portfolio Growth: The total loan portfolio grew to over $5 billion, marking a 24% increase year over year.
Improved Loan Pricing: The weighted average coupon on the total portfolio increased to 9.53%, indicating improved loan pricing.
Net Interest Margin Increase: The net interest margin (NIM) for Q4 was 3.70%, an increase from the previous quarter, driven by strong loan production and favorable market conditions.
NPL Resolution Gains: Non-performing loan (NPL) resolution gains were $5.6 million in Q4, demonstrating effective management of delinquent assets.
Strong Liquidity Position: The company maintained a strong liquidity position with nearly $96 million available, ensuring capacity for future growth.
Positive Growth Outlook: The outlook for 2025 remains positive, with expectations for continued growth in production and earnings.
Negative
Non-Performing Loan Stability: The non-performing loan (NPL) rate at the end of Q4 was 10.7%, which is relatively flat compared to 10.6% for Q3, indicating a lack of improvement in managing non-performing assets.
Net Charge-Off Concerns: Despite a strong overall performance, the company reported net charge-offs of $700,000 in Q4, which could indicate potential issues in loan performance.
CECL Reserve Analysis: The company’s CECL reserve was $4.2 million, which is within the expected range but highlights the ongoing need for reserves against potential loan losses.
Wildfire Impact on Operations: The company experienced devastating wildfires in Southern California, which, although only two properties were affected, could pose risks to future operations and borrower stability in the region.
Market Risk Exposure: While the company reported strong earnings, the reliance on a niche market could expose it to risks if market conditions change or if competition increases significantly.
VEL FAQs
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VEL Earning Call Sentiment
Velocity Financial, Inc. (NYSE:VEL) Q4 2024 Earnings Call Transcript
VEL.N
-0.24%Positive
The earnings call summary highlights strong financial performance with increased EPS, core earnings, and loan production. Positive guidance on future earnings and a healthy market outlook are complemented by effective NPL management and securitization success. The Q&A section reveals management's confidence in handling market volatility and capital needs. Despite some regulatory and economic risks, the company's stable niche market position and optimistic guidance suggest a positive stock reaction, likely in the 2% to 8% range.
