VEL (Velocity Financial) Beneish M-Score: -2.18 (As of Jun. 25, 2026)


VEL Velocity Financial Inc VEL
68 GF Score
Price $17.70
GF Value $25.93
Valuation Significantly Undervalued
! 3 Warning Signs
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What is Velocity Financial Beneish M-Score?

Velocity Financial VEL -0.17% 68 Beneish M-Score is -2.18 as of Jun. 25, 2026. GuruFocus rates VEL with a GF Score™ of 68/100 and a GF Value™ of $25.93 (Significantly Undervalued). The stock has 3 warning signs investors should review. Among 1,396 Banks companies, Velocity Financial ranks worse than 82.31% on this metric.

Note: Financial institutions were excluded from the sample in Beneish paper when calculating Beneish M-Score. Thus, the prediction might not fit banks and insurance companies.

The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.18 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Velocity Financial's Beneish M-Score or its related term are showing as below:

VEL' s Beneish M-Score Range Over the Past 10 Years
Min: -2.52   Med: -2.18   Max: -1.99
Current: -2.18

During the past 10 years, the highest Beneish M-Score of Velocity Financial was -1.99. The lowest was -2.52. And the median was -2.18.

VEL
68GF Score
Velocity Financial Inc VEL
Beneish M-Score is just one metric. See GF Score™, valuation, warning signs, and more.
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Velocity Financial Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Velocity Financial for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.8281+0.528 * 1+0.404 * 1.0001+0.892 * 1.4626+0.115 * 0.9994
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.8181+4.679 * 0.010778-0.327 * 1.1132
=-2.18

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

This Year (Mar26) TTM:Last Year (Mar25) TTM:
Total Receivables was $196.3 Mil.
Revenue was 78.314 + 94.129 + 77.251 + 78.035 = $327.7 Mil.
Gross Profit was 78.314 + 94.129 + 77.251 + 78.035 = $327.7 Mil.
Total Current Assets was $0.0 Mil.
Total Assets was $7,591.4 Mil.
Property, Plant and Equipment(Net PPE) was $1.3 Mil.
Depreciation, Depletion and Amortization(DDA) was $1.7 Mil.
Selling, General, & Admin. Expense(SGA) was $96.5 Mil.
Total Current Liabilities was $0.0 Mil.
Long-Term Debt & Capital Lease Obligation was $6,624.0 Mil.
Net Income was 22.363 + 34.797 + 25.373 + 25.997 = $108.5 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0.0 Mil.
Cash Flow from Operations was 12.086 + -4.489 + 11.452 + 7.662 = $26.7 Mil.
 Total Receivables was $162.1 Mil.
Revenue was 62.11 + 63.622 + 49.265 + 49.069 = $224.1 Mil.
Gross Profit was 62.11 + 63.622 + 49.265 + 49.069 = $224.1 Mil.
Total Current Assets was $0.0 Mil.
Total Assets was $5,971.5 Mil.
Property, Plant and Equipment(Net PPE) was $1.6 Mil.
Depreciation, Depletion and Amortization(DDA) was $2.1 Mil.
Selling, General, & Admin. Expense(SGA) was $80.7 Mil.
Total Current Liabilities was $0.0 Mil.
Long-Term Debt & Capital Lease Obligation was $4,680.8 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total Receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(196.303 / 327.729) / (162.075 / 224.066)
=0.59898 / 0.723336
=0.8281

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(224.066 / 224.066) / (327.729 / 327.729)
=1 / 1
=1

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than Property, Plant and Equipment to Total Assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (0 + 1.324) / 7591.443) / (1 - (0 + 1.592) / 5971.53)
=0.999826 / 0.999733
=1.0001

4. SGI = Sales Growth Index

Ratio of Revenue in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=327.729 / 224.066
=1.4626

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(2.081 / (2.081 + 1.592)) / (1.733 / (1.733 + 1.324))
=0.566567 / 0.566896
=0.9994

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(96.511 / 327.729) / (80.653 / 224.066)
=0.294484 / 0.359952
=0.8181

7. LVGI = Leverage Index

The ratio of total debt to Total Assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((6623.954 + 0) / 7591.443) / ((4680.807 + 0) / 5971.53)
=0.872555 / 0.783854
=1.1132

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(108.53 - 0 - 26.711) / 7591.443
=0.010778

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Velocity Financial has a M-score of -2.18 suggests that the company is unlikely to be a manipulator.

Frequently Asked Questions Learn more about Beneish M-Score →
What does a Beneish M-Score of -2.18 mean?
Velocity Financial (VEL) has a Beneish M-Score of -2.18 as of Jun. 25, 2026. The Beneish M-score measures the likelihood of earnings manipulation. View historical data on Velocity Financial and its competitors. According to the industry distribution chart, Velocity Financial ranks #1149 out of 1396 companies in the Banks industry, placing it in the top 82.3%.
Is Velocity Financial's Beneish M-Score too high?
Velocity Financial's current Beneish M-Score is -2.18. Based on the distribution chart, Velocity Financial ranks #1149 out of 1396 companies in the Banks industry, which is in the bottom quartile relative to peers. Overall, Velocity Financial has a GF Score™ of 68/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Velocity Financial's Beneish M-Score compare to LDI and BETR?
According to the Banks industry distribution chart, Velocity Financial ranks #1149 out of 1396 companies for Beneish M-Score. This places Velocity Financial in the lower half of its industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Beneish M-Score for a Banks company?
A good Beneish M-Score depends on the Banks industry context. However, Beneish M-Score should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Beneish M-Score mean?
A high Beneish M-Score can signal that a stock is expensive relative to its fundamentals. The Beneish M-score measures the likelihood of earnings manipulation. View historical data on Velocity Financial and its competitors. Velocity Financial's current Beneish M-Score is -2.18. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Velocity Financial stock overvalued right now?
Based on GuruFocus' analysis, Velocity Financial (VEL) is currently considered Significantly Undervalued. The stock's GF Value™ is $25.93, compared to a current price of $17.70 — trading 31.7% below its estimated fair value. The current Beneish M-Score is -2.18. Velocity Financial's overall GF Score™ is 68/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Beneish M-Score calculated?
Beneish M-Score is calculated from a company's financial statements. For Velocity Financial (VEL), the current Beneish M-Score is -2.18 as of Jun. 25, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.

Is Velocity Financial (VEL) Overvalued in 2026?

Based on GuruFocus' analysis, Velocity Financial stock appears to be undervalued. The current stock price of $17.70 is trading 31.7% below its estimated GF Value™ of $25.93. GuruFocus considers Velocity Financial to be Significantly Undervalued.

Key valuation signals for VEL:

  • Beneish M-Score: -2.18
  • GF Value™: $25.93 vs. price of $17.70 (31.7% below fair value)
  • GF Score™: 68/100 with 3 warning signs

No single metric tells the full story. See the VEL stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.

Velocity Financial Business Description

Address 2945 Townsgate Road, Suite 110, Westlake Village, CA, USA, 91361
Velocity Financial Inc is a United States-based real estate finance company. Company operates in a large fragmented market with substantial demand for financing and limited supply of institutional financing alternative The company originates and manages investor loans secured by residential rental and small commercial properties. The company earns revenue in the form of interest income. It operates in New York, California, Florida, New Jersey, and other states.
68GF Score

Get the complete analysis for VEL

Beneish M-Score is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.

$17.70
Price
$25.93
GF Value