Velocity Financial (VEL) Meets Q3 Earnings Estimates

Velocity Financial (VEL) recently announced its quarterly earnings, reporting earnings of $0.47 per share. This result met the expectations set by the Zacks Consensus Estimate. In comparison, the company earned $0.37 per share the same quarter last year. These earnings have been adjusted to exclude non-recurring items.

In the previous quarter, analysts predicted that Velocity Financial would earn $0.43 per share, while the actual earnings reported were $0.45, resulting in a positive surprise of 4.65%.

Looking at the past four quarters, Velocity Financial has outperformed consensus earnings estimates three times.

During the quarter ending in September 2024, Velocity Financial's revenue reached $35.06 million. However, this amount fell short of the Zacks Consensus Estimate by 2.89%. When compared to revenues of $27.37 million from the same quarter last year, there is a clear growth, although the company has only surpassed revenue estimates once in the last four quarters.

The future performance of Velocity Financial’s stock will depend significantly on management's comments during the earnings call and the market's reactions to the recent quarterly results.

Since the start of the year, shares of Velocity Financial have increased by approximately 13.8%, whereas the S&P 500 has seen a gain of around 24.3%. This comparison raises questions about the future trajectory of Velocity Financial's stock.

Future Outlook for Velocity Financial

Despite underperforming compared to the broader market this year, one key question investors may have is what lies ahead for Velocity Financial. Understanding the company’s earnings outlook can provide valuable insights. This outlook includes the current consensus earnings expectations for upcoming quarters as well as any recent changes in those expectations.

Research indicates that there is a strong connection between stock price movements and trends in earnings estimate revisions. Investors can monitor these revisions or utilize established rating tools like the Zacks Rank, which has proven effective in making sense of earnings estimate changes.

Before the latest earnings announcement, the trend for earnings estimate revisions at Velocity Financial had mixed signals. The current status following the earnings report results in a Zacks Rank of #3 (Hold), suggesting that the stock is likely to perform in line with the market in the near future. For those interested, they can find the complete list of today's Zacks #1 Rank (Strong Buy) stocks.

Looking forward, it will be intriguing to see how earnings estimates for upcoming quarters and the current fiscal year evolve. The current consensus EPS estimate stands at $0.48, with anticipated revenues of $37.8 million for the next quarter, and $1.91, with $135.8 million in revenues for the full fiscal year.

Additionally, it’s important to consider that the overall industry outlook can substantially influence stock performance. The Financial - Mortgage & Related Services industry, to which Velocity Financial belongs, is currently ranked in the top 8% of over 250 Zacks industries. Historical data shows that the top half of ranked industries tend to outperform the bottom half significantly.

Another company in the broader finance sector, James River Group, has yet to report its results for the quarter ending September 2024, with an expected announcement on November 11. Analysts anticipate James River Group will report earnings of $0.66 per share, marking a 37.5% increase year-over-year, and revenues around $185 million, reflecting a 20.8% decline from the previous year.

Velocity, Earnings, Financial