Velocity Financial, Inc. (VEL): fair value, margin of safety and Wheel Score

Is VEL undervalued?

At 16.77 (close of 5 Nov 2026), VEL trades 82% below the GLS average fair value of 92.04. That average comes from 8 models run on the latest filings, and 8 of them land above the current price. Margins of safety over 30% are the exception rather than the rule across the ~7,400 stocks we value each night, so the number earns Velocity Financial, Inc. the full Value points in the Wheel Score - and a closer look at what the market is pricing in.

There is a wide gap between Payback Time (17.67) and DCF (439.77). When the models are this far apart the "fair value" is really a range, and the margin of safety above should be read with that range in mind.

Ranked against every other company we cover, neither cheapness nor growth clearly wins for VEL, so the nightly engine files it under Blend (value score 87, growth score 75, out of 100).

Nine valuation models for VEL

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

Velocity Financial, Inc. scores 6 of 9 on the Piotroski F-score: a middling result that passes the "Piotroski 6 or more" Wheel Trade Filter. Some of the nine tests on profitability, leverage and efficiency are failed, so the accounts are worth a look before selling a put on the name. On durability VEL scores 5.4/10 on the GLS Moat - a middle reading; the Moat Score tab on the Quote page's Financials view shows which of the four parts hold it back.

Returns on capital are thin or negative - ROIC 1.5%, ROE 15.6%, ROA 1.4% - with debt at 9.72 times equity and a free-cash-flow yield of 3.4%. Debt of 9.72 times equity is on the high side for the sector and is worth checking against the cash flow before treating the stock as a long-term hold.

Velocity Financial, Inc. pays no dividend, so the DDM model does not apply and a covered-call holder earns only the premium and any price gain.

Institutional ownership scores 10/10, insider activity 1/10 and Congressional trading 5/10 on the GLS smart-money scales.

Wheel Score 51: Fair

A Wheel Score of 51 keeps Velocity Financial, Inc. under 70, the mark only a stock that passes all 9 Wheel Trade Filters can reach: it fails filter 8, big enough - market cap $662M (under $1.0B). The parts: value strong, premium strong, moat fair, health good, red flags good, option trading fair, stability fair.

Implied volatility is 59% on the near-the-money contracts 20-60 days out - inside the 35-60% sweet spot the Wheel Score rewards most: enough premium to be worth selling, not so much that the risk is unpaid. Chain open interest is 15,111 contracts across all expiries - enough for the wheel at normal size.

Volume runs at 191k shares a day on a market cap of $662M, with a beta of 0.77 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score rates that fair.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls: a stock must pass all 9 Wheel Trade Filters to score 70, and the score then ranks the ones that pass; the Sunday Scan is the top 10. It is updated nightly and is not a recommendation. How the Wheel Score works · the walkthrough lesson shows how it fits into a trade, start to finish.

Upcoming events

No upcoming earnings date is recorded for VEL in the nightly calendar.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

Similar stocks in Financial - Mortgages

The 12 companies below are the closest to Velocity Financial, Inc. by market cap within the Financial - Mortgages industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.

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