Velocity Composites Plc (VEL) AI Stock Analysis

• Market Cap: £9.43M
• Dividend Yield: N/A
• Average Volume (3M): 81.47K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.72
• 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: 118,221
• 30 Day Avg. Volume: 81,467
• 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): 0.38
• Revenue Forecast (FY): £2.03B

• Rating: 47 Neutral
• Price Target: 18.00p ▼(-15.89% Downside)

Velocity Composites Plc faces significant challenges with profitability and cash flow, reflected in a low financial performance score. Technical indicators show bearish momentum, and the negative P/E ratio highlights valuation concerns. These factors contribute to a below-average overall stock score.

Velocity Composites Plc Business Overview & Revenue Model

Company Description

Velocity Composites plc, together with its subsidiaries, provides engineered composite material kits to the aerospace industry in the United Kingdom, Europe, and internationally. It offers structural material kits, such as ply generation, shape management and configuration control, life management, and cutting and supply service, as well as materials comprising woven fabrics, unidirectional fabrics, impregnated metallic meshes, and film adhesives. The company also provides engineered vacuum bag material kits; and honeycomb, core potting compounds, and co-bonded materials, including hole potting compound kits, cut shape metallic foils and meshes for lightning strike protection/EMI shielding, honeycomb and foam core products, and kitted co-bonded films. In addition, it offers process optimization products, such as elastomeric intensification systems, elastomeric pre-form membranes, elastomeric tool feature protection to simplify vacuum bags, heater mats for composite repair and pre-forming, paint masking systems, cured component protection films, Mylar templates and shape verification systems, thermocouples, and vacuum connection systems, as well as engineering support and project implementation services. The company was founded in 2007 and is headquartered in Burnley, the United Kingdom.

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: Positive
• RSI: Positive
• STOCH: Neutral

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 20.83, above the 50-day MA of 21.30, and below the 200-day MA of 24.99, indicating a bearish trend. The MACD of -1.02 indicates Positive momentum. The RSI at 27.72 is Positive, neither overbought nor oversold. The STOCH value of 34.81 is Neutral, 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
CHG	73 Outperform	£1.54B	39.43	―	1.51%	―	―
AVON	66 Neutral	£570.89M	112.60	4.18%	1.00%	14.69%	―
SNR	66 Neutral	£803.60M	23.10	8.19%	1.08%	-13.81%	13.86%
ALU	65 Neutral	£91.22M	9.59	―	4.15%	19.86%	19.09%
CHRT	63 Neutral	£592.27M	28.76	14.40%	1.30%	33.33%	19.01%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
VEL	47 Neutral	£9.43M	―	-13.02%	―	12.52%	75.23%

Velocity Composites Plc Corporate Events

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.