Virtu Financial (VIRT) AI Stock Analysis

• Market Cap: $5.55B
• Dividend Yield: 2.68%
• Average Volume (3M): 1.04M
• Price to Earnings (P/E): 12.1
• Beta (1Y): 0.43
• Revenue Growth: 24.22%
• EPS Growth: 112.34%
• Country: US
• Employees: 969
• Sector: Financial
• Sector Strength: 79
• Industry: Financial - Capital Markets
• EPS (TTM): 2.98
• Shares Outstanding: 86,618,614
• 10 Day Avg. Volume: 1,198,532
• 30 Day Avg. Volume: 1,039,103
• PEG Ratio: 0.11
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.77
• Price to Cash Flow (P/CF): 3.70
• P/FCF Ratio: 3.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $39.00
• Price Target Upside: 5.32% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

Virtu Financial shows strong financial health with robust revenue growth and profitability, supported by strategic initiatives and disciplined management. Despite some operational challenges, the company is well-positioned in the capital markets industry. Technical indicators are mixed, but the stock remains attractive due to its valuation and dividend yield. Recent corporate actions and earnings call insights further reinforce the company's potential for growth.

Positive Factors

Earnings

Virtu Financial Inc's earnings per share for the fourth quarter are raised due to higher market making revenues.

Growth Initiatives

VIRT is well positioned to benefit from an improving fundamental backdrop and longer term as they continue to make progress on growth initiatives.

Price Target

The price target for Virtu Financial Inc is increased by $1, reflecting a positive outlook.

Negative Factors

Crypto Opportunities

The opportunity set in crypto has declined materially relatively to activity seen in 1Q.

Market Conditions

September is typically slower which could present some offset to the strength seen in July/early August.

Operating Expenses

Higher market making revenues are partially offset by higher operating expenses for Virtu Financial Inc.

Virtu Financial Business Overview & Revenue Model

Company Description

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. The company's solutions enable clients to trade on various venues across countries and in multiple asset classes, including global equities, ETFs, foreign exchange, futures, fixed income, cryptocurrencies, and other commodities. Its analytics platform provides a range of pre- and post-trade services, data products, and compliance tools for clients to invest, trade, and manage risk across markets. Virtu Financial, Inc. was founded in 2008 and is headquartered in New York, New York.

How the Company Makes Money

Virtu Financial makes money primarily through market making and execution services. As a market maker, Virtu provides liquidity to the financial markets by continuously buying and selling securities, profiting from the bid-ask spread. The firm uses sophisticated algorithms to execute high-frequency trades, capturing small price discrepancies across different markets and asset classes. Additionally, Virtu earns revenue through commissions and fees from its execution services, where it acts as an intermediary for institutional clients, helping them execute large orders with minimal market impact. The company may also engage in proprietary trading, leveraging its technology and market insights to generate additional returns. Key partnerships with major financial institutions and exchanges further enhance its capabilities and access to liquidity, contributing to its earnings.

Virtu Financial Financial Statement Overview

Summary

Virtu Financial shows a robust financial performance with a high gross profit margin and healthy net profit margin. The company has managed to reduce its debt levels significantly, improving its financial stability. However, declining EBIT margins and negative free cash flow growth indicate areas that require attention. Despite these challenges, the company is well-positioned in the capital markets industry with a solid foundation for future growth.

Income Statement

Virtu Financial shows a solid financial performance in its income statement. The TTM data reveals a gross profit margin of 78.81%, demonstrating efficient management of production costs relative to revenue. The net profit margin stands at 10.83%, which is healthy for the industry. Revenue growth from 2023 to the TTM period is 11.27%, indicating positive momentum. However, there is a decline in EBIT margin from 42.19% in 2021 to 31.64% in TTM, which suggests some challenges in operating efficiency.

Balance Sheet

The balance sheet of Virtu Financial indicates moderate leverage with a debt-to-equity ratio of 0.18 in the TTM period, a significant improvement from previous years, suggesting a reduced reliance on debt financing. The equity ratio is 9.69%, showing a relatively small portion of assets financed by equity, which might pose a risk if liabilities increase. Return on equity (ROE) is 18.58%, reflecting effective use of equity to generate profits.

Cash Flow

Virtu Financial's cash flow analysis shows robust free cash flow generation with a TTM free cash flow to net income ratio of 0.68 and an operating cash flow to net income ratio of 0.75. However, the free cash flow growth rate from 2023 to TTM is negative at -58.35%, highlighting potential challenges in maintaining cash flow levels.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.88B	2.29B	2.01B	2.58B	2.94B
	Gross Profit
2.88B	1.39B	2.01B	2.58B	2.94B
	EBIT
644.97M	967.72M	567.85M	1.03B	1.35B
	EBITDA
2.53B	1.05B	699.06M	1.17B	1.49B
	Net Income Common Stockholders
276.42M	142.04M	265.03M	476.88M	649.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
872.51M	820.44M	981.58M	1.07B	889.56M
	Total Assets
15.36B	14.47B	10.58B	10.32B	9.97B
	Total Debt
268.37M	1.73B	1.80B	1.61B	1.64B
	Net Debt
-604.15M	906.77M	814.37M	533.67M	749.72M
	Total Liabilities
13.87B	13.06B	1.80B	1.61B	1.64B
	Stockholders Equity
1.49B	1.20B	1.34B	1.55B	1.47B
Cash Flow		Free Cash Flow
544.68M	454.00M	679.60M	1.15B	1.03B
	Operating Cash Flow
598.99M	491.78M	706.80M	1.17B	1.06B
	Investing Cash Flow
-61.85M	-94.48M	-29.53M	-87.35M	-2.56M
	Financing Cash Flow
-469.56M	-585.03M	-735.75M	-957.86M	-839.92M

Virtu Financial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 37.03
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VIRT, the sentiment is Positive. The current price of 37.03 is below the 20-day moving average (MA) of 37.13, above the 50-day MA of 36.97, and above the 200-day MA of 32.92, indicating a neutral trend. The MACD of 0.51 indicates Negative momentum. The RSI at 57.74 is Neutral, neither overbought nor oversold. The STOCH value of 45.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VIRT.

Virtu Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW	81 Outperform	$30.27B	54.91	8.97%	0.33%	28.97%	36.09%
IBKR	74 Outperform	$72.14B	24.65	19.20%	0.58%	19.54%	22.23%
SNEX	73 Outperform	$3.67B	13.27	16.40%	―	60.57%	17.39%
MKTX	73 Outperform	$7.66B	27.92	20.45%	1.47%	9.06%	6.10%
SCHW	72 Outperform	$140.30B	25.19	13.30%	1.35%	1.87%	17.63%
VIRT	70 Outperform	$5.55B	12.08	21.20%	2.68%	24.22%	112.34%
Sector *	64 Neutral	$13.46B	9.44	9.34%	4.72%	16.14%	-8.80%

Virtu Financial Corporate Events

Virtu Financial Extends Executive Employment Agreements

On February 26, 2025, Virtu Financial Operating LLC, a subsidiary of Virtu Financial, Inc., amended the employment agreements of two key executives, Joseph Molluso and Stephen Cavoli, extending their terms to February 28, 2028. This move ensures continuity in leadership, potentially strengthening the company’s market position and operational stability.