Analyst Donald Fandetti of Wells Fargo maintained a Sell rating on Velocity Financial, with a price target of $20.00.
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Donald Fandetti has given his Sell rating due to a combination of factors impacting Velocity Financial. Despite a strong quarter with notable net interest margin (NIM) and loan growth, there are concerns about the sustainability of these metrics. The company’s NIM is expected to decrease in the upcoming quarter, moving back toward the first half of 2025 average, which suggests potential pressure on future earnings.
Additionally, while Velocity Financial has a strong presence in the fragmented lending market, Fandetti sees better relative value in other areas of specialty finance. The company’s non-performing loans (NPLs) remain a concern, despite a slight improvement. Given these factors, along with a price target that suggests limited upside, Fandetti has rated the stock as Underweight, indicating a cautious outlook.
Based on the recent corporate insider activity of 37 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of VEL in relation to earlier this year.