Velocity Financial (VEL) Upgraded to Strong Buy: Here's Why

Core Viewpoint - Velocity Financial (VEL) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - For Velocity Financial, the rising earnings estimates and the rating upgrade suggest an improvement in the company's underlying business, likely leading to an increase in stock price [5][10]. Earnings Estimate Revisions - For the fiscal year ending December 2024, Velocity Financial is expected to earn $1.91 per share, reflecting a 24% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Velocity Financial has increased by 13%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Velocity Financial to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [10].