NasdaqGS:VRTU

Stock Analysis Report

Executive Summary

Virtusa Corporation provides digital engineering and information technology (IT) outsourcing services primarily in North America, Europe, and Asia.

Snowflake

Fundamentals

Reasonable growth potential with adequate balance sheet.


Similar Companies

Share Price & News

How has Virtusa's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

4.1%

VRTU

2.0%

US IT

1.3%

US Market


1 Year Return

-30.4%

VRTU

23.1%

US IT

5.9%

US Market

Return vs Industry: VRTU underperformed the US IT industry which returned 23.1% over the past year.

Return vs Market: VRTU underperformed the US Market which returned 5.9% over the past year.


Shareholder returns

VRTUIndustryMarket
7 Day4.1%2.0%1.3%
30 Day-10.6%-0.1%-1.9%
90 Day-19.4%-2.2%-1.8%
1 Year-30.4%-30.4%24.5%23.1%8.3%5.9%
3 Year62.2%62.2%97.9%89.7%45.6%36.2%
5 Year-1.0%-1.0%154.6%131.0%66.1%47.9%

Price Volatility Vs. Market

How volatile is Virtusa's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Virtusa undervalued compared to its fair value and its price relative to the market?

6.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: VRTU ($35.43) is trading below our estimate of fair value ($37.78)

Significantly Undervalued: VRTU is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: VRTU is poor value based on its PE Ratio (44.4x) compared to the IT industry average (35.9x).

PE vs Market: VRTU is poor value based on its PE Ratio (44.4x) compared to the US market (17.5x).


Price to Earnings Growth Ratio

Low PEG Ratio: VRTU is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: VRTU is good value based on its PB Ratio (2.7x) compared to the US IT industry average (4.3x).


Next Steps

Future Growth

How is Virtusa forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

31.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VRTU's forecast earnings growth (31.5% per year) is above the savings rate (2.7%).

Earnings vs Market: VRTU's earnings (31.5% per year) are forecast to grow faster than the US market (14.4% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: VRTU's revenue (8.9% per year) is forecast to grow faster than the US market (7.3% per year).

High Growth Revenue: VRTU's revenue (8.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: VRTU's Return on Equity is forecast to be low in 3 years time (17%).


Next Steps

Past Performance

How has Virtusa performed over the past 5 years?

-38.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: VRTU's earnings have declined by -38.3% per year over the past 5 years.

Accelerating Growth: VRTU has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: VRTU has become profitable in the last year, making it difficult to compare its past year earnings growth to the IT industry (8.4%).


Return on Equity

High ROE: VRTU's Return on Equity (5.6%) is considered low.


Return on Assets

ROA vs Industry: VRTU's Return on Assets is below or equal to the IT industry average last year.


Return on Capital Employed

ROCE Improving: VRTU has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Virtusa's financial position?


Financial Position Analysis

Short Term Liabilities: VRTU's short term assets ($564.0M) exceeds its short term liabilities ($218.4M)

Long Term Liabilities: VRTU's short term assets (564.0M) exceeds its long term liabilities (440.0M)


Debt to Equity History and Analysis

Debt Level: VRTU's debt to equity ratio (70.1%) is considered high

Reducing Debt: Insufficient data to determine if VRTU's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: VRTU's debt is well covered by operating cash flow (21.1%).

Interest Coverage: VRTU's interest payments on its debt are well covered by EBIT (4.2x coverage).


Balance Sheet

Inventory Level: VRTU has a low level of unsold assets or inventory.

Debt Coverage by Assets: VRTU's debt is covered by short term assets (assets are 1.531200x debt).


Next Steps

Dividend

What is Virtusa's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.5%markettop25%3.8%industryaverage1.3%forecastin3Yearsn/a

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: Unable to evaluate VRTU's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate VRTU's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.

Stable Dividend: Insufficient data to determine if VRTU's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if VRTU's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of VRTU's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Virtusa's salary, the management and board of directors tenure and is there insider trading?

9.7yrs

Average management tenure


CEO

Kris Canekeratne (53yo)

19.8yrs

Tenure

US$7,979,479

Compensation

Mr. Krishan Aruna Canekeratne, also known as Kris, is a Co-Founder of Virtusa Corporation and has been its Chief Executive Officer since 2000. Mr. Canekeratne has served as Chairman of Board of Directors a ...


CEO Compensation Analysis

Compensation vs. Market: Kris's total compensation ($USD7.98M) is about average for companies of similar size in the US market ($USD2.76M).

Compensation vs Earnings: Kris's compensation has been consistent with company performance over the past year.


Management Age and Tenure

9.7yrs

Average Tenure

55yo

Average Age

Experienced Management: VRTU's management team is seasoned and experienced (9.7 years average tenure).


Board Age and Tenure

6.1yrs

Average Tenure

64yo

Average Age

Experienced Board: VRTU's board of directors are considered experienced (6.1 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$212,50003 Jun 19
Joseph Doody
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,000
Max PriceUS$42.50
SellUS$126,75028 Feb 19
Ranjan Kalia
EntityIndividual
Role
Chief Financial Officer
Executive VP of Finance
Shares2,500
Max PriceUS$50.70
SellUS$207,73128 Feb 19
Raj Rajgopal
EntityIndividual
Shares4,113
Max PriceUS$50.54
SellUS$180,02722 Feb 19
Ranjan Kalia
EntityIndividual
Role
Chief Financial Officer
Executive VP of Finance
Shares3,542
Max PriceUS$51.05
SellUS$270,45920 Feb 19
Raj Rajgopal
EntityIndividual
Shares5,285
Max PriceUS$51.20
SellUS$597,25714 Feb 19
Ranjan Kalia
EntityIndividual
Role
Chief Financial Officer
Executive VP of Finance
Shares11,386
Max PriceUS$52.50
SellUS$494,58314 Feb 19
Raj Rajgopal
EntityIndividual
Shares9,490
Max PriceUS$52.12
SellUS$313,74713 Feb 19
Sundararajan Narayanan
EntityIndividual
Role
Head of Human Resources
Executive VP & Chief People Officer
Shares6,000
Max PriceUS$52.29
SellUS$504,68507 Jan 19
Krishan Canekeratne
EntityIndividual
Role
Chief Executive Officer
Co-Founder
Shares12,000
Max PriceUS$42.06

Ownership Breakdown


Management Team

  • Kris Canekeratne (53yo)

    Co-Founder

    • Tenure: 19.8yrs
    • Compensation: US$7.98m
  • Tom Holler (56yo)

    Executive VP & Chief Strategy Officer

    • Tenure: 18.8yrs
    • Compensation: US$2.16m
  • Roger Modder (55yo)

    Executive VP

    • Tenure: 8.4yrs
    • Compensation: US$2.09m
  • Jim Francis

    Senior Officer

    • Tenure: 0yrs
  • Kirsten Paragona

    Global Head of Media Relations

    • Tenure: 0yrs
  • Ranjan Kalia (58yo)

    Executive VP of Finance

    • Tenure: 11yrs
    • Compensation: US$2.55m
  • Samir Dhir (48yo)

    President & Head of Americas

    • Tenure: 2.2yrs
    • Compensation: US$3.19m
  • Stuart Chandler

    Head of Global BPM & Senior VP

    • Tenure: 3.9yrs
  • Sundar Narayanan

    Executive VP & Chief People Officer

    • Tenure: 0yrs
  • William Maina

    Head of Investor Relations

    • Tenure: 0yrs

Board Members

  • Izhar Armony (55yo)

    Independent Director

    • Tenure: 15.5yrs
    • Compensation: US$199.98k
  • Joe Doody (67yo)

    Independent Director

    • Tenure: 2.7yrs
    • Compensation: US$199.98k
  • Debby Hopkins (64yo)

    Independent Director

    • Tenure: 1.3yrs
    • Compensation: US$224.97k
  • Row Moriarty (72yo)

    Lead Independent Director

    • Tenure: 0yrs
    • Compensation: US$239.98k
  • Kris Canekeratne (53yo)

    Co-Founder

    • Tenure: 19.8yrs
    • Compensation: US$7.98m
  • Vikram Pandit (62yo)

    Independent Director

    • Tenure: 2.4yrs
    • Compensation: US$209.98k
  • Al-Noor Gulamali Abdulla Ramji (65yo)

    Independent Director

    • Tenure: 8.7yrs
    • Compensation: US$199.98k
  • Bill O'Brien (74yo)

    Independent Director

    • Tenure: 10.9yrs
    • Compensation: US$214.98k
  • Barry Nearhos (61yo)

    Independent Director

    • Tenure: 3.6yrs
    • Compensation: US$221.98k

Company Information

Virtusa Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Virtusa Corporation
  • Ticker: VRTU
  • Exchange: NasdaqGS
  • Founded: 1996
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: US$1.072b
  • Shares outstanding: 30.25m
  • Website: https://www.virtusa.com

Number of Employees


Location

  • Virtusa Corporation
  • 132 Turnpike Road
  • Suite 300
  • Southborough
  • Massachusetts
  • 1772
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
VRTUNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDAug 2007
EG1DB (Deutsche Boerse AG)YesCommon StockDEEURAug 2007

Biography

Virtusa Corporation provides digital engineering and information technology (IT) outsourcing services primarily in North America, Europe, and Asia. The company offers business and IT consulting services, i ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/15 00:00
End of Day Share Price2019/10/14 00:00
Earnings2019/06/30
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.