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VIRT

Virtu Financial NasdaqGS:VIRT Stock Report

Last Price

US$20.93

Market Cap

US$3.7b

7D

-9.9%

1Y

-14.3%

Updated

29 Sep, 2022

Data

Company Financials +
VIRT fundamental analysis
Snowflake Score
Valuation5/6
Future Growth2/6
Past Performance2/6
Financial Health5/6
Dividends3/6

VIRT Stock Overview

Virtu Financial, Inc., a financial services company, provides data, analytics, and connectivity products to clients worldwide.

Virtu Financial, Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Virtu Financial
Historical stock prices
Current Share PriceUS$20.93
52 Week HighUS$38.63
52 Week LowUS$20.60
Beta-0.093
1 Month Change-9.82%
3 Month Change-10.33%
1 Year Change-14.33%
3 Year Change32.68%
5 Year Change23.48%
Change since IPO-5.64%

Recent News & Updates

Sep 26

Virtu Financial: Benefits From Market Volatility

Summary Virtu is one of the largest market making firms in the marketplace. Market making can often benefit during volatile markets, as bid/ask spreads are wider. It is currently paying a 4% dividend yield and is trading at 8x P/E. Virtu Financial, Inc. (VIRT), is one of the largest market making firms that are publicly traded. I believe VIRT could be an interesting counter-cyclical name for investors to consider as markets become more volatile. Market makers make money from trading, and profit opportunities can actually increase in volatile markets. It is currently trading at depressed valuations, with a good chance of beating analyst estimates. It is also paying a 4% dividend yield. Company Overview Virtu Financial is a leading market maker and broker to many global markets. It provides execution, market making, liquidity sourcing, and analytics to market participants. Virtu Outperforms When Markets Are Volatile Looking at Virtu's financial metrics, we see that the company typically does well when markets are volatile. For example, Q1 and Q2 2020 were at the depths of the COVID crash and recovery, and Virtu had extraordinarily good average daily net trading income ("NTI") in those periods (Figure 1). Figure 1 - Virtu Key Financial Metrics (VIRT Q2/2022 Presentation) In fact, if we overlay Virtu's Daily NTI trends with its stock price and the VIX Index (a measure of market volatility), we see that in general, Virtu's financial performance and stock price outperform when there are periods of volatility (Figure 2). Figure 2 - VIRT Outperforms in Volatile Markets (Author created with data from company reports and price charts from StockCharts.com) We can also observe that most of the outperformance comes from market making trading income. This is because when markets are volatile, market makers have wider bid/ask spreads to profit from. As markets retest June lows and volatility starts to rise, we may see another period of strong financial performance from Virtu. Valuation Attractive Valuation-wise, Virtu is screening cheap, with the stock trading at 8.3x Forward P/E, a discount to the financial sector median 10.3x. It is also paying a 4.1% current dividend, which we believe to be quite safe given the low valuation multiple. Figure 3 - VIRT Valuation (Seeking Alpha) Estimates Are Too Low If we look at analyst estimates, consensus has VIRT delivering $1.6 billion in revenues for 2022, and $2.81 in EPS. However, with 6 months already gone by, VIRT has reported H1/2022 revenues of $1.3 billion and $1.77 in diluted EPS. This implies Wall Street analysts are only expecting $300 million in revenues and $1.04 in EPS for the rest of the year. We think this is simply too low. Figure 4 - VIRT Estimates (TIKR.com) In Q2, daily NTI was $5.8 million, which translated into $605 million of total revenues and $0.78 in EPS. Given current heightened volatility, there is a very high likelihood September and Q4 2022 will see solid financial performance for Virtu. Looking at the company's NTI sensitivity, Virtu is currently on pace to deliver $7 million in NTI and over $4 in EPS (Figure 5). If Q4 turns out to be volatile like other market drawdown periods, we could see significant upside to NTI and EPS. Figure 5 - VIRT NTI Sensitivity (VIRT Q2/2022 Presentation) Excess Cash Has Been Returned To Shareholders Via Buybacks In addition to paying a sizeable quarterly dividend, Virtu has also been very active in share buybacks. In the past two years, the company has bought back more than 27 million shares, or 10.4% of shares outstanding (Figure 6). Given the expected strong levels of earnings power in the Virtu franchise, we don't see this dynamic changing.

Aug 02
Virtu Financial (NASDAQ:VIRT) Has Announced A Dividend Of $0.24

Virtu Financial (NASDAQ:VIRT) Has Announced A Dividend Of $0.24

Virtu Financial, Inc. ( NASDAQ:VIRT ) has announced that it will pay a dividend of $0.24 per share on the 15th of...

Shareholder Returns

VIRTUS Capital MarketsUS Market
7D-9.9%-3.4%-3.1%
1Y-14.3%-24.0%-21.5%

Return vs Industry: VIRT exceeded the US Capital Markets industry which returned -23.7% over the past year.

Return vs Market: VIRT exceeded the US Market which returned -20.3% over the past year.

Price Volatility

Is VIRT's price volatile compared to industry and market?
VIRT volatility
VIRT Average Weekly Movement4.5%
Capital Markets Industry Average Movement0.4%
Market Average Movement6.9%
10% most volatile stocks in US Market15.7%
10% least volatile stocks in US Market2.8%

Stable Share Price: VIRT is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: VIRT's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
2008973Doug Cifuhttps://www.virtu.com

Virtu Financial, Inc., a financial services company, provides data, analytics, and connectivity products to clients worldwide. The company operates in two segments, Market Making and Execution Services. Its product suite includes offerings in execution, liquidity sourcing, analytics and broker-neutral, and multi-dealer platforms in workflow technology.

Virtu Financial, Inc. Fundamentals Summary

How do Virtu Financial's earnings and revenue compare to its market cap?
VIRT fundamental statistics
Market CapUS$3.65b
Earnings (TTM)US$359.26m
Revenue (TTM)US$2.25b

6.0x

P/E Ratio

1.0x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
VIRT income statement (TTM)
RevenueUS$2.25b
Cost of RevenueUS$921.64m
Gross ProfitUS$1.33b
Other ExpensesUS$973.64m
EarningsUS$359.26m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Nov 03, 2022

Earnings per share (EPS)3.49
Gross Margin59.12%
Net Profit Margin15.94%
Debt/Equity Ratio202.4%

How did VIRT perform over the long term?

See historical performance and comparison

Dividends

4.6%

Current Dividend Yield

30%

Payout Ratio