Velocity Composites Plc (VEL) AI Stock Analysis

• Market Cap: £9.02M
• Dividend Yield: N/A
• Average Volume (3M): 67.41K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.74
• Revenue Growth: 12.52%
• EPS Growth: 75.23%
• Country: UK
• Employees: 102
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): -0.01
• Shares Outstanding: 54,669,373
• 10 Day Avg. Volume: 37,937
• 30 Day Avg. Volume: 67,413
• PEG Ratio: 0.20
• Price to Book (P/B): 2.37
• Price to Sales (P/S): 0.60
• P/FCF Ratio: -64.92
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £40.00
• Price Target Upside: 86.92% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): -0.74
• Revenue Forecast (FY): £1.48B

• Rating: 46 Neutral
• Price Target: 16.00p ▼(-25.23% Downside)

Velocity Composites Plc faces significant challenges with profitability and cash flow, reflected in a low financial performance score. The technical analysis indicates a bearish trend, and the valuation is unattractive due to a negative P/E ratio. These factors collectively result in a low overall stock score.

Positive Factors

Revenue Growth

Strong revenue growth indicates increasing demand for Velocity's products, reflecting successful market penetration and potential for future expansion.

Strategic Partnerships

These partnerships provide a stable demand for products, enhancing revenue stability and supporting long-term growth prospects.

Manageable Debt Levels

Manageable debt levels suggest financial stability, allowing the company to invest in growth opportunities without excessive financial strain.

Negative Factors

Profitability Challenges

Persistent profitability issues can hinder reinvestment in the business and affect long-term financial health and shareholder returns.

Negative Free Cash Flow

Negative free cash flow indicates potential liquidity challenges, limiting the company's ability to fund operations and growth initiatives internally.

Reliance on Liabilities

High reliance on liabilities can increase financial risk, potentially impacting the company's ability to withstand economic downturns.

Velocity Composites Plc Business Overview & Revenue Model

Company Description

Velocity Composites Plc (VEL) is a leading provider of advanced composite materials and solutions for the aerospace and defense sectors. The company specializes in the design, manufacture, and supply of composite components, which are essential for modern aircraft, enhancing performance while reducing weight. With a focus on innovation and sustainability, Velocity Composites offers a range of products, including prepreg materials, laminates, and engineered solutions that cater to the needs of its clients in the aerospace industry.

How the Company Makes Money

Velocity Composites generates revenue primarily through the sale of its composite materials and components to aerospace manufacturers. The company's revenue model is built on a combination of direct sales, long-term contracts, and partnerships with key players in the aerospace sector. Significant revenue streams include the supply of specialized composite materials for aircraft production, as well as aftermarket services and support for existing aircraft. The company also benefits from strategic partnerships with leading aerospace OEMs (Original Equipment Manufacturers) and Tier 1 suppliers, which provide a stable demand for its products and contribute to its earnings growth.

Velocity Composites Plc Financial Statement Overview

Summary

Velocity Composites Plc shows revenue growth potential with a 40.19% increase, but struggles with profitability due to negative EBIT and net income. The balance sheet indicates manageable debt but a reliance on liabilities. Cash flow challenges persist with negative free cash flow, highlighting liquidity concerns.

Income Statement

Velocity Composites Plc has shown some improvement in revenue with a notable revenue growth rate of 40.19% from 2023 to 2024, indicating potential recovery. However, the company struggles with profitability, highlighted by negative EBIT and Net Income across periods. The gross profit margin is reasonable at 25.91%, but the persistent negative net profit margin reflects ongoing challenges in managing costs and achieving profitability.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio of 0.48, indicating manageable leverage. However, the company's equity ratio is 45.81%, suggesting a reliance on liabilities. Return on Equity remains negative due to ongoing losses, posing a risk to shareholder value. The company's asset base has decreased slightly, which may impact future growth capabilities.

Cash Flow

The operating cash flow has turned positive in 2024, but free cash flow remains negative, reflecting challenges in cash management. The operating cash flow to net income ratio is positive, indicating some efficiency in converting earnings to cash, though net income remains negative. This reflects potential liquidity challenges that need addressing for sustained growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	22.70M	23.01M	16.41M	11.96M	9.77M	13.56M
Gross Profit	6.58M	5.96M	3.09M	2.75M	2.54M	2.32M
EBITDA	726.00K	231.00K	-1.93M	-622.00K	-638.00K	-2.45M
Net Income	-739.00K	-845.00K	-3.14M	-1.34M	-1.21M	-3.13M
Balance Sheet
Total Assets	11.35M	12.81M	14.70M	9.81M	9.69M	10.66M
Cash, Cash Equivalents and Short-Term Investments	1.17M	1.66M	3.18M	2.34M	3.48M	3.27M
Total Debt	2.91M	2.79M	3.55M	4.21M	4.06M	3.47M
Total Liabilities	6.01M	6.94M	8.13M	6.41M	5.12M	4.97M
Stockholders Equity	5.34M	5.87M	6.57M	3.40M	4.57M	5.68M
Cash Flow
Free Cash Flow	675.00K	-214.00K	-3.96M	-118.00K	261.00K	-1.87M
Operating Cash Flow	1.09M	370.00K	-1.83M	280.00K	325.00K	-838.00K
Investing Cash Flow	-856.00K	-584.00K	-2.12M	-356.00K	-51.00K	-1.03M
Financing Cash Flow	-1.05M	-1.41M	4.79M	-1.06M	-66.00K	1.71M

Velocity Composites Plc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 21.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:VEL, the sentiment is Negative. The current price of 21.4 is above the 20-day moving average (MA) of 14.88, above the 50-day MA of 17.02, and below the 200-day MA of 22.78, indicating a neutral trend. The MACD of -0.20 indicates Negative momentum. The RSI at 60.81 is Neutral, neither overbought nor oversold. The STOCH value of 87.50 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:VEL.

Velocity Composites Plc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SNR	70 Outperform	£869.60M	25.00	8.19%	1.06%	-13.81%	13.86%
CHRT	69 Neutral	£434.02M	23.19	13.24%	1.58%	23.91%	-14.66%
ALU	66 Neutral	£92.65M	9.98	25.06%	4.63%	12.60%	6.64%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
CHG	63 Neutral	£1.33B	27.67	14.44%	1.64%	-2.53%	22.25%
AVON	53 Neutral	£547.72M	68.93	6.27%	1.02%	10.74%	237.07%
VEL	46 Neutral	£9.02M	-12.04	-13.02%	―	12.52%	75.23%

Velocity Composites Plc Corporate Events

Velocity Composites CEO’s Family Alters Shareholding Structure

Velocity Composites plc announced that Emma Bridges, wife of CEO Jon Bridges, sold 333,333 ordinary shares at 15p each, impacting the shareholding structure. Despite this sale, Jon Bridges retains a significant interest in the company, holding 9.20% of the total voting rights. This transaction, conducted on the London Stock Exchange, is part of routine disclosures under the UK Market Abuse Regulation.

The most recent analyst rating on (GB:VEL) stock is a Hold with a £18.00 price target. To see the full list of analyst forecasts on Velocity Composites Plc stock, see the GB:VEL Stock Forecast page.

Velocity Composites Aligns Leadership with Strategic Goals Through Share Options

Velocity Composites plc has announced the grant of 1,049,139 share options to certain directors and PDMRs, as part of a voluntary 20% salary sacrifice plan for the year ending October 2026. This initiative aims to align the recipients with the company’s strategic objectives and incentivize them effectively. The share options, exercisable after November 2026, are intended to strengthen the company’s operational focus and strategic execution, potentially enhancing its industry positioning and stakeholder value.

The most recent analyst rating on (GB:VEL) stock is a Hold with a £18.00 price target. To see the full list of analyst forecasts on Velocity Composites Plc stock, see the GB:VEL Stock Forecast page.

Velocity Composites Reports Revenue Decline but Expects EBITDA Growth

Velocity Composites plc reported a decrease in unaudited revenue for FY25 to £20.7 million, attributed to lower-than-expected Airbus A350 production rates and delays in program transfers from a US customer. Despite the revenue drop, the company expects adjusted EBITDA to more than double from FY24, thanks to improved operational efficiencies and reduced overhead costs. The company remains optimistic about its long-term prospects, focusing on cash generation and operational improvements to position itself for future growth. However, the board anticipates FY26 revenue to be lower than current market expectations due to ongoing delays and market shifts, though EBITDA is expected to improve further.

The most recent analyst rating on (GB:VEL) stock is a Hold with a £23.00 price target. To see the full list of analyst forecasts on Velocity Composites Plc stock, see the GB:VEL Stock Forecast page.

Velocity Composites Secures Major Contract Renewal and Expansion

Velocity Composites plc has announced a significant 10-year contract renewal and expansion with a Tier One customer for the Airbus A350 programme, expected to generate $2.5 million in revenue in FY2026. This contract not only renews the supply of kits for the A350-900 but also expands to include the A350-1000 variant, potentially reaching a total value of $54 million. The contract secures a long-term revenue stream, supporting the company’s growth and reinforcing its market position in the aerospace sector.

The most recent analyst rating on (GB:VEL) stock is a Hold with a £23.00 price target. To see the full list of analyst forecasts on Velocity Composites Plc stock, see the GB:VEL Stock Forecast page.