MODEL VERDICT
Velocity Financial, Inc. (VEL)
Relative Valuation•Peer multiples, Monte Carlo simulation & quality-adjusted fair value
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Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| May 1, 2026 | MODERATE | 0.69 | $19.42 | CURRENT | — |
| Apr 24, 2026 | MODERATE | 0.69 | $19.47 | CURRENT | — |
| Apr 17, 2026 | MODERATE | 0.68 | $19.90 | CURRENT | — |
| Apr 16, 2026 | MODERATE | 0.69 | $19.56 | CURRENT | — |
| Apr 10, 2026 | MODERATE | 0.68 | $19.14 | CURRENT | — |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Industry Median P/E 4 industry peers | $39.38 | +102.8% | 30% | A | Peer Data |
| Price / Book 7 industry peers | $14.95 | -23.0% | 25% | B | Model Driven |
| Price / Tangible Book 7 bank peers | $16.87 | -13.1% | 20% | B+ | Bank Primary |
| Earnings Yield 4 industry peers | $39.32 | +102.5% | 8% | B | Data |
| Forward P/E 5 analyst estimates | $25.61 | +31.9% | 7% | A- | Analyst Est. |
| Weighted Output Blended model output | $26.65 | +37.2% | 100% | 80 | SIGNIFICANTLY UNDERVALUED |
| EPS Growth ↓ | P/E Multiple → | 4× | 5× | 7× (Current) | 9× | 11× |
|---|---|---|---|---|---|
| Bear Case (4%) | $11 | $14 | $20 | $26 | $31 |
| Conservative (7%) | $12 | $15 | $21 | $26 | $32 |
| Base Case (10.0%) | $12 | $15 | $21 | $27 | $33 |
| Bull Case (14%) | $12 | $16 | $22 | $28 | $34 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 11.09 | 10.38 | 7.55 | 15.93 | 3.05 |
| EV/EBIT | 60.27 | 70.50 | 14.16 | 79.93 | 27.39 |
| EV/EBITDA | 56.74 | 61.23 | 14.16 | 76.30 | 22.47 |
| P/FCF | 15.01 | 8.94 | 2.35 | 44.33 | 15.33 |
| P/FFO | 9.79 | 9.76 | 6.19 | 14.72 | 2.97 |
| P/TBV | 1.15 | 1.29 | 0.57 | 1.41 | 0.34 |
| P/AFFO | 9.87 | 9.83 | 6.42 | 14.78 | 2.94 |
| P/B Ratio | 1.11 | 1.26 | 0.57 | 1.36 | 0.33 |
| P/S Ratio | 1.95 | 1.39 | 0.75 | 4.51 | 1.39 |
Based on our peer multiples analysis with 14 valuation metrics, the model estimates VEL's fair value at $26.65 vs the current price of $19.42, implying +37.2% upside potential. Model verdict: Significantly Undervalued. Confidence: 80/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $26.65 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $23.53 (P10) to $28.74 (P90), with a median of $26.11.
VEL's current P/E of 7.1x compares to the industry median of 14.3x (4 peers in the group). This represents a -50.7% discount to the industry. The historical average P/E is 11.1x over 5 years. Signal: Deep Discount.
7 analysts cover VEL with a consensus rating of Buy. The consensus price target is $23.00 (range: $23.00 — $23.00), implying +18.4% upside from the current price. Grade breakdown: Strong Buy (0), Buy (5), Hold (1), Sell (1), Strong Sell (0).
The model confidence score is 80/100, based on: data completeness (24), peer quality (25), historical depth (16), earnings stability (8), and model agreement (7). Cyclicality penalty: -0 points. The model shows strong agreement across inputs.
The model flags several key risks: (1) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that VEL's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of -0.2σ, meaning margins are 0.2 standard deviations below their historical average. If margins revert to the 5-year mean (20.4%), the model estimates fair value drops by 11760.0% to approximately $42. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.