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On Tuesday, Citizens JMP reaffirmed its positive stance on Velocity Financial (NYSE:VEL), maintaining a Market Outperform rating and a $21.00 price target. The endorsement follows the company’s first-quarter 2025 performance review, along with an analysis of the recently filed Form 10-Q and updates to their working model. According to InvestingPro data, the company maintains robust financial health with an impressive current ratio of 8.08, indicating strong liquidity. The financial institution continues to be an active player in lending, with a strong demand for its secured debt offerings. This is evidenced by the completion of two additional VCC securitizations in the second quarter of 2025.
Citizens JMP’s price target for Velocity Financial is based on a multiple of 9.5 times the firm’s newly raised 2025 core earnings estimate of $2.20 per share, up from the previous estimate of $1.85. The company currently trades at a P/E ratio of 8.68, suggesting an attractive valuation relative to its growth prospects. Additionally, the target is pegged at 1.20 times the projected year-end 2025 book value and 8.6 times the initial 2026 earnings estimate of $2.45 per share. The analysts highlight that this price target represents a potential upside of approximately 17% over Velocity Financial’s last closing price of $17.92, though InvestingPro’s Fair Value analysis suggests the stock may be overvalued at current levels.
Velocity Financial’s continued activity in the lending space and the successful completion of securitizations reflect the company’s robust position in secured debt markets. With an impressive revenue growth of 39.36% and a gross profit margin of 72.24% in the last twelve months, the company demonstrates strong operational efficiency. The higher earnings estimates for 2025 and 2026 by Citizens JMP suggest confidence in the company’s growth trajectory and financial health. For deeper insights into Velocity Financial’s performance metrics and growth potential, investors can access comprehensive analysis through InvestingPro, which offers exclusive financial health scores and additional ProTips.
The financial analyst at Citizens JMP has expressed a strong conviction in the prospects of Velocity Financial, citing the company’s consistent performance and strategic financial activities. The $21.00 price target is a reflection of this positive outlook and the anticipated growth in core earnings.
Investors and market watchers will likely keep an eye on Velocity Financial’s stock performance and future financial results to see if the company meets or exceeds the expectations set by Citizens JMP’s analysis and projections.
In other recent news, Velocity Financial Inc. reported its first-quarter 2025 earnings, revealing a mixed performance with an earnings per share (EPS) of $0.51, which fell short of the forecasted $0.56. However, the company exceeded revenue expectations, reporting $69.1 million against a forecast of $55.3 million, marking a significant revenue beat. The company’s loan portfolio also grew by 7.8% to $5.5 billion, reflecting robust growth in its small commercial lending division. Additionally, the company aims to expand its loan portfolio to $10 billion over the next five years, with plans for modest headcount increases and potential office expansions.
Furthermore, Velocity Financial recently held its Annual Meeting of Shareholders, where all directors were re-elected with strong shareholder support. Shareholders approved the compensation of named executive officers and ratified RSM US LLP as the independent auditor for 2025. Another development from the meeting was the approval to increase the share reserve under the company’s 2020 Omnibus Incentive Plan. These outcomes indicate continued investor confidence in the company’s governance and strategic direction.
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