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Virtu Financial (VIRT)
NASDAQ:VIRT

Virtu Financial (VIRT) AI Stock Analysis

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Virtu Financial

(NASDAQ:VIRT)

Rating:80Outperform
Price Target:
$47.00
▲(14.97%Upside)
Virtu Financial's strong financial performance, highlighted by high profitability and robust cash flow, significantly contributes to its stock score. Strategic growth initiatives and positive corporate events further bolster the outlook. However, technical indicators show only moderate bullish momentum, and concerns about retail sustainability temper the enthusiasm.
Positive Factors
Earnings Forecast
Following 1Q25 earnings, the adjusted EPS for 2Q25 was raised by 15% due to higher ANTI and execution services revenue.
Revenue Growth
The company posted its sixth consecutive quarter of increasing revenue in its Execution Services, achieving its best result since early 2022.
Strategic Initiatives
Newer business initiatives are accelerating, with contributions from options market-making, ETF blocks, and crypto significantly impacting the firm's strong performance.
Negative Factors
Market Volatility
Potential downside risks include choppy equity markets that disengage retail investors, reducing volumes.
Valuation Concerns
The stock has outperformed significantly, but a less attractive valuation and potential for profit deceleration in the second half of 2025 led to a rating downgrade to Neutral.
Volume Decline
Concerns have risen that volumes and spreads could experience a meaningful decline in the second half of 2025, particularly in the retail channel.

Virtu Financial (VIRT) vs. SPDR S&P 500 ETF (SPY)

Virtu Financial Business Overview & Revenue Model

Company DescriptionVirtu 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 MoneyVirtu Financial primarily makes money through its market making and execution services. As a market maker, the company provides liquidity to financial markets by offering to buy and sell securities, thereby earning a spread between the bid and ask prices. Additionally, Virtu generates revenue through its execution services, where it facilitates trades for institutional clients, earning fees or commissions. Key revenue streams include trading profits from its market making activities and service fees from clients utilizing its execution platforms. The company's earnings are significantly influenced by trading volumes, market volatility, and the effective deployment of its proprietary technology. Furthermore, partnerships with financial institutions and exchanges enhance its operational reach and contribute to its revenue growth.

Virtu Financial Earnings Call Summary

Earnings Call Date:Apr 23, 2025
(Q1-2025)
|
% Change Since: 6.57%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Positive
The call highlighted strong financial performance, especially in trading income and market making, alongside strategic growth in digital assets and new markets. However, concerns about the sustainability of retail activity and technical issues were noted.
Q1-2025 Updates
Positive Updates
Record Trading Income
The company reported $1.30 of normalized EPS on total adjusted net trading income per day of $8.3 million, marking the highest net trading income per day since 2021.
Strong EBITDA Performance
Quarterly EBITDA was $320 million with an EBITDA margin of 64%, highlighting the company's healthy financial performance.
Global Market Making Success
Market making operations had their best quarter since 2021, with strong performances particularly in non-customer global equities, digital asset, and ETN block market making franchises.
Execution Services Growth
Virtu Execution Services achieved its seventh consecutive quarter of increasing net trading income, showing resilience across varying market conditions.
Retail Participation Resilience
Retail activity in the market reached levels not seen since 2020, with long-term retail engagement showing a secular uptrend according to the company's data.
Expansion in Asia and Digital Assets
The company expanded its listed options business in Asia and digital asset coverage, demonstrating strategic growth in new markets.
Negative Updates
Concerns about Retail Sustainability
There are ongoing debates about the sustainability of retail participation, although the company argues that data shows steady engagement.
Technical Difficulties During Call
The earnings call experienced a technical difficulty, causing a temporary disruption.
Company Guidance
During Virtu Financial, Inc.'s first quarter 2025 call, the company provided various key metrics, indicating robust performance and strategic growth. They reported a normalized EPS of $1.30 with total adjusted net trading income per day reaching $8.3 million, marking their highest since 2021. The quarterly EBITDA stood at $320 million, with an impressive EBITDA margin of 64%. The company's market-making segment showed significant strength, achieving its best quarter since early 2021, driven by successes in global non-customer equities, digital assets, and ETN block market-making. Virtu's Execution Services demonstrated resilience with a seven-quarter streak of increasing net trading income. The firm remains optimistic about its VES business, aiming for a $2 million per day run rate, fueled by product enhancements and strategic hires. Moreover, Virtu has been proactive in capital markets, especially with at-the-market offerings, and is expanding in digital assets and ETF block businesses. The company maintained a disciplined approach to cost management, with adjusted operating expenses at $193 million, while actively executing its share repurchase program, reducing share count by 18.9% since its inception.

Virtu Financial Financial Statement Overview

Summary
Virtu Financial demonstrates strong financial health with excellent profitability, efficient cash flow management, and moderate leverage. High profit margins and robust cash flows position it well within the industry. However, inconsistent revenue growth and low equity ratio require attention.
Income Statement
82
Very Positive
Virtu Financial's income statement reveals strong profitability with a gross profit margin of 81.34% and a net profit margin of 27.95% for the TTM, indicating efficient cost management and healthy earnings. The EBIT and EBITDA margins are also robust at 30.74% and 69.74%, respectively. However, revenue growth has been volatile, showing a TTM growth rate of 0.77% after a decline the previous year, suggesting some instability in revenue generation.
Balance Sheet
75
Positive
The balance sheet shows a moderate debt-to-equity ratio of 0.21, indicating a conservative leverage approach. The return on equity is impressive at 51.89% for the TTM, highlighting efficient use of equity. The equity ratio stands at 8.90%, slightly low, suggesting a risk of over-leverage in case of fluctuating market conditions. Overall, the balance sheet is stable but with potential vulnerability due to low equity support.
Cash Flow
88
Very Positive
Cash flow analysis shows strong operational performance with an operating cash flow to net income ratio of 1.25, indicating good cash generation relative to earnings. The free cash flow has grown significantly, with a TTM free cash flow of $986.52 million, up from $544.68 million the previous year, reflecting robust cash management. The free cash flow to net income ratio is 1.22, suggesting efficient conversion of profits into cash.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
2.90B2.88B2.29B2.01B2.58B2.94B
Gross Profit
2.02B1.77B1.39B2.01B2.58B2.94B
EBIT
1.05B1.32B967.72M567.85M1.03B1.35B
EBITDA
1.66B1.39B1.05B699.06M1.17B1.49B
Net Income Common Stockholders
313.91M276.42M142.04M265.03M476.88M649.20M
Balance SheetCash, Cash Equivalents and Short-Term Investments
399.58M872.51M820.44M981.58M1.07B889.56M
Total Assets
12.79B15.36B14.47B10.58B10.32B9.97B
Total Debt
1.73B5.71B1.73B1.80B1.61B1.64B
Net Debt
1.33B4.84B906.77M814.37M533.67M749.72M
Total Liabilities
1.73B13.87B13.06B1.80B1.61B1.64B
Stockholders Equity
1.21B1.25B1.20B1.34B1.55B1.47B
Cash FlowFree Cash Flow
956.86M544.68M454.00M679.60M1.15B1.03B
Operating Cash Flow
1.01B598.99M491.78M706.80M1.17B1.06B
Investing Cash Flow
-65.38M-61.85M-94.48M-29.53M-87.35M-2.56M
Financing Cash Flow
-601.60M-469.56M-585.03M-735.75M-957.86M-839.92M

Virtu Financial Technical Analysis

Technical Analysis Sentiment
Positive
Last Price40.88
Price Trends
50DMA
39.29
Positive
100DMA
38.09
Positive
200DMA
35.48
Positive
Market Momentum
MACD
0.27
Positive
RSI
53.19
Neutral
STOCH
49.20
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 40.88 is below the 20-day moving average (MA) of 41.24, above the 50-day MA of 39.29, and above the 200-day MA of 35.48, indicating a neutral trend. The MACD of 0.27 indicates Positive momentum. The RSI at 53.19 is Neutral, neither overbought nor oversold. The STOCH value of 49.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VIRT.

Virtu Financial Risk Analysis

Virtu Financial disclosed 46 risk factors in its most recent earnings report. Virtu Financial reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
Artificial intelligence and machine learning are new and emerging technologies and could ultimately cause harm to our business. Q4, 2024

Virtu Financial Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$87.86B28.7019.26%0.52%14.67%23.59%
TWTW
80
Outperform
$32.96B57.269.14%0.30%28.86%29.26%
80
Outperform
$6.21B11.6123.87%2.35%26.02%142.79%
77
Outperform
$159.89B26.7514.12%1.18%2.32%37.66%
75
Outperform
$8.05B37.2916.25%1.40%7.22%-15.53%
68
Neutral
$4.16B14.2016.69%67.71%19.42%
64
Neutral
$12.80B9.717.59%16985.66%12.07%-7.53%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
VIRT
Virtu Financial
40.88
18.99
86.75%
IBKR
Interactive Brokers
206.82
84.95
69.71%
SNEX
StoneX Group
83.50
34.06
68.89%
MKTX
Marketaxess Holdings
226.13
22.89
11.26%
SCHW
Charles Schwab
87.24
14.02
19.15%
TW
Tradeweb Markets
139.86
34.03
32.16%

Virtu Financial Corporate Events

Executive/Board ChangesShareholder Meetings
Virtu Financial Confirms Key Decisions at Annual Meeting
Neutral
Jun 3, 2025

On June 2, 2025, Virtu Financial, Inc. held its annual meeting of stockholders where several key decisions were made. The election of Class I directors for a three-year term, approval of executive compensation, and the continuation of annual advisory votes on executive pay were confirmed. Additionally, the appointment of PricewaterhouseCoopers LLP as the independent auditor for the fiscal year 2025 was ratified, and amendments to the Management Incentive Plan were approved, impacting the company’s governance and compensation strategies.

The most recent analyst rating on (VIRT) stock is a Hold with a $25.00 price target. To see the full list of analyst forecasts on Virtu Financial stock, see the VIRT Stock Forecast page.

Delistings and Listing ChangesBusiness Operations and Strategy
Virtu Financial Announces Transfer to NYSE
Positive
May 29, 2025

On May 29, 2025, Virtu Financial announced its decision to transfer the listing of its Class A Common Stock from Nasdaq to the New York Stock Exchange (NYSE), with trading on Nasdaq ceasing on June 16, 2025, and commencing on the NYSE on June 17, 2025. This strategic move is aimed at leveraging the NYSE’s platform to enhance transparency, excellence, and long-term value creation for shareholders, while deepening relationships with investors and maintaining its role as a prominent liquidity provider in the global financial markets.

The most recent analyst rating on (VIRT) stock is a Hold with a $25.00 price target. To see the full list of analyst forecasts on Virtu Financial stock, see the VIRT Stock Forecast page.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.