VEL enters its Q1 2026 earnings report today with a quiet lending market and a stock that has quietly outpaced expectations — but analysts are thin on the ground and past prints have disappointed.
The lending setup is about as relaxed as it gets. Short interest is modest at 2.6% of the free float, down roughly 5% over the past month, and borrow availability is far from stressed — cost to borrow has dropped sharply this week to 0.67%, nearly 29% below last week's level, after briefly spiking toward 2.2% in late April. Availability in the lending pool remains loose, with the lending market running well below its 52-week tightest levels. There is no meaningful short-seller pressure building into this print.
Options positioning adds a wrinkle, though context matters here. The put/call ratio is running near its 52-week high of 5.07 — a striking number in isolation, but it has been elevated throughout April and the z-score of 0.71 places it only modestly above the 20-day average of 4.97. The elevated PCR appears structural for this small-cap name rather than a sudden defensive shift ahead of earnings. The stock itself has drifted higher — up 7.3% over the past month and 1.2% on Wednesday alone — bringing it to $19.57.
The bull case rests on portfolio momentum. Total loans grew 7.7% to $5.4 billion, adjusted book value per share climbed to $18.50, and the company resolved $76.4 million in nonperforming loans at a net gain — signs of disciplined credit management. Bears point to net interest margin compression: NIM fell to 3.35% from 3.70% at year-end, and rising funding costs alongside plateauing house price appreciation pressure the spread economics that underpin Velocity's model. Analysts who cover the name remain constructive — BTIG holds a Buy with a $23 target, and Citizens carried a Market Outperform with a $22 target — but activity has been sparse and the most recent reiteration from BTIG dates to March, with the consensus last formally struck in November 2025.
Insider activity tells a consistent, if unremarkable, story. The CFO, general counsel, and an executive vice president have all been steady sellers over the past 90 days, with net sales totalling around $560,000. The volumes are small relative to the company's float and the trades carry low significance scores, suggesting routine plan sales rather than conviction calls. Concentration is the more notable ownership angle: TruArc Partners holds 34% of shares outstanding, PIMCO holds 32%, and Beach Point Capital — which added 563,000 shares in Q1 — holds nearly 17%. With the three largest holders accounting for over 80% of the float, the stock's daily moves are effectively driven by a handful of decisions.
The Q1 report will test whether Velocity can arrest the NIM slide while sustaining loan growth — and whether the portfolio's credit quality holds firm as its nonperforming loan ratio ticks higher.
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