Interactive Brokers shares jump as it secures spot in S&P 500
In a recent move to expand its financial flexibility, Velocity Financial, Inc. (NYSE:VEL), currently valued at $571 million, has amended its Equity Distribution Agreements to potentially double its stock offering. According to InvestingPro data, the company maintains strong liquidity with current assets exceeding short-term obligations by nearly 11 times. On Monday, the company announced that it entered into Amendment No. 2 to increase the maximum aggregate offering amount from $50 million to $100 million and the maximum number of shares from 4 million to 6 million, including previously sold shares.
This adjustment to the Equity Distribution Agreements, initially dated May 3, 2024, and first amended on December 12, 2024, involves BTIG, LLC and Virtu Americas LLC as Placement Agents. The company’s strong financial position is reflected in its impressive revenue growth of 45% over the last twelve months, as reported by InvestingPro. The legal opinion of Simpson Thacher & Bartlett LLP regarding the shares of common stock to be offered was filed along with this announcement.
Velocity Financial, a company incorporated in Delaware and based in Westlake Village, California, operates within the finance services sector. This strategic decision to amend the Equity Distribution Agreements could be indicative of the company’s plans to bolster its capital or invest in growth opportunities, although the specific use of any proceeds from the stock sales was not disclosed in the filing.
The filing with the Securities and Exchange Commission (SEC) on April 11, 2025, indicates the company’s compliance with the necessary legal frameworks to proceed with the increased offering. The company’s common stock is traded on the New York Stock Exchange under the ticker symbol (NYSE:VEL).
Investors and market watchers will be monitoring Velocity Financial’s use of the increased offering capacity, which could have implications for its financial strategy and stock market performance. The company currently trades at a P/E ratio of 10.1, with two analysts recently revising their earnings expectations upward for the upcoming period. For deeper insights into VEL’s valuation and growth prospects, investors can access comprehensive analysis through InvestingPro’s detailed research reports, available for over 1,400 US stocks.
In other recent news, Velocity Financial reported strong fourth-quarter earnings, surpassing expectations with an EPS of $0.60, exceeding the consensus estimate of $0.48. The company also experienced a 37% increase in net revenue, driven by a significant 64% rise in loan originations for the year, bringing the total loan portfolio to $5.1 billion, a 24% year-over-year increase. Analysts at Raymond (NSE:RYMD) James maintained an Outperform rating with a $23 target, citing robust loan demand and stable credit performance as key factors in their optimistic outlook. Similarly, Citizens JMP reaffirmed a Market Outperform rating with a $21 target, highlighting Velocity Financial’s strong earnings report and effective capital management strategies.
In addition to its earnings performance, Velocity Financial successfully raised $7.3 million in new common equity capital through an at-the-market offering program to support its growth initiatives. The company’s adjusted book value increased to $18.73 per share, reflecting the higher fair market value of loans carried at amortized cost. During the earnings call, Velocity Financial’s executives addressed questions about managing non-performing loans, emphasizing their focus on resolution strategies and potential capital raises to support growth. Despite challenges in the real estate sector, analysts remain confident in Velocity Financial’s strategic positioning and potential for continued growth.
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