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Virtu Financial (VIRT)
NYSE:VIRT
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Virtu Financial
(NYSE:VIRT)
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Rating:67Neutral
Price Target:
$44.00
▲(8.21% Upside)
The score is driven primarily by strong profitability but tempered by high leverage and weakening free-cash-flow growth. Valuation is supportive (low P/E with a dividend), while technicals show an uptrend that appears overbought. The latest earnings call was broadly positive on results and guidance priorities, but flagged sustainability and regulatory risks.
Positive Factors
High Profitability & Margins
Sustained very high EBIT and net margins indicate a capital-efficient, scalable trading model with strong pricing and cost control. Durable margins support reinvestment in technology, dividend continuity, and resilience versus peers, providing a long-term cash generation buffer.
High Returns on Incremental Capital
Management's reported ~100% average return on incremental capital in 2025 shows an ability to deploy capital into trading capacity and generate outsized incremental profits. If repeatable, this drives long-term ROE expansion and funds organic growth without dilutive financing.
Tech-enabled, Cross-Asset Market Making
A technology-first market-making model across multiple asset classes creates scale, low-latency advantages and revenue diversification. Structural tech and algorithmbased capabilities raise barriers to entry and enable durable market share and cross-asset hedging benefits over time.
Negative Factors
High Leverage
A D/E of ~5.7 signifies meaningful leverage, increasing default and refinancing risks in stress periods. High debt limits strategic flexibility, raises fixed costs, and can amplify downturns in trading revenues, constraining capital allocation and long-term resilience.
Declining Free Cash Flow Growth
A nearly 35% decline in FCF growth undermines liquidity available for dividends, buybacks, or reinvestment. Even with strong operating cash conversion, worsening FCF trends may reflect higher capital intensity or working capital swings, reducing financial flexibility over time.
Earnings Cyclicality from Market Conditions
Virtu's trading income and returns are structurally tied to volatility and volumes. That dependence creates persistent earnings cyclicality, making medium-term revenue and return projections sensitive to macro market regimes and reducing predictability of through-the-cycle performance.
Virtu Financial (VIRT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.73B
Dividend Yield2.88%
Average Volume (3M)908.20K
Price to Earnings (P/E)7.3
Beta (1Y)0.43
Revenue Growth27.66%
EPS Growth131.25%
CountryUS
Employees969
SectorFinancial
Sector Strength70
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)1.85
Shares Outstanding84,906,700
10 Day Avg. Volume982,463
30 Day Avg. Volume908,197
Financial Highlights & Ratios
PEG Ratio0.10
Price to Book (P/B)2.49
Price to Sales (P/S)1.08
P/FCF Ratio5.73
Enterprise Value/Market Cap1.84
Enterprise Value/Revenue2.91
Enterprise Value/Gross Profit4.87
Enterprise Value/Ebitda5.87
Forecast
1Y Price Target
$44.80Price Target Upside10.18% Upside
Rating ConsensusHold
Number of Analyst Covering5
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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 generates revenue through its market making activities, where it earns profits from the bid-ask spread on securities trading. The company engages in high-frequency trading, executing numerous transactions at rapid speeds to take advantage of price discrepancies across different markets. Key revenue streams include transaction fees from executing trades, revenues from proprietary trading, and income from investment in financial instruments. Additionally, Virtu often enters into partnerships with exchanges and financial institutions, enhancing its trading volume and improving its market presence, which further contributes to its earnings. The firm's ability to provide liquidity in various asset classes also allows it to capitalize on market volatility, generating additional revenue during periods of heightened trading activity.
Virtu Financial Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational and financial results: record-high ANTI for the quarter and year, high adjusted EBITDA and margins, successful capital deployment with very high returns, and continued VES momentum. The main cautions were a sequential decline in quoted 605 spreads for retail flow, increased compensation expense, reliance on a favorable market environment (which may not persist), limited disclosure on detailed asset-class contributions, and regulatory uncertainty around new markets. Overall, positives (record revenues, margins, capital returns, and VES progress) substantially outweighed the lowlights, though several risks and transparency limitations were noted.Q4-2025 Updates
Positive Updates
Record Quarterly and Annual Trading Income
Adjusted net trading income (ANTI) of $9.7 million per day in Q4 2025, totaling $613 million for the quarter (the highest quarterly total since Q1 2021). Full-year 2025 ANTI of $8.6 million per day, totaling $2.1 billion.
Strong Segment Performance — Market Making and VES
Market Making ANTI of $7.8 million per day in Q4 and $6.7 million per day for full-year 2025. Virtu Execution Services (VES) reached $2.0 million per day for the quarter and $1.9 million per day for the year — the seventh consecutive quarter of ANTI growth for VES and a new high watermark since early 2022.
Robust Profitability and Margins
Adjusted EBITDA of $442 million for Q4 2025 with a 72% margin; adjusted EPS of $1.85 for the quarter. Full-year adjusted EBITDA of $1.4 billion with a 65% margin and adjusted EPS of $5.73, all the highest levels since 2021.
Capital Accumulation and High Returns on Capital
Invested capital increased by approximately $625 million in 2025 (about $448 million added in H2), with management reporting an average return of 100% on incremental capital over the year and a 100% return on incremental capital in the quarter.
Maintained Shareholder Distribution
Company maintained its quarterly dividend at $0.24 per share.
Operational Drivers — Favorable Market Environment and Execution
Performance benefited from favorable operating conditions: realized volatility and VIX were up, equity share volumes increased, and elevated volumes across multiple asset classes enabled strong cross-asset trading and execution.
Negative Updates
Sequential Decline in Quoted 605 Spreads
Management noted a sequential decline in the dollar value of quoted 605 spreads for the retail flow business during the quarter, indicating some weakness in that publicly reported metric despite overall strong results.
Rising Compensation Expense
Full-year 2025 cash compensation ratio at 19% (within historical range) increased due to investments in retaining and acquiring talent across trading and technology, putting upward pressure on operating expenses.
Reliance on a Favorable Market Environment
Management emphasized that the quarter was positively impacted by a favorable operating environment (elevated volatility and volumes). They cautioned returns on incremental capital (100% this quarter/average) are unlikely to be sustained at that level and performance may vary quarter-to-quarter.
Limited Granularity and Disclosure on Asset-Class Contributions
Management declined to provide a detailed asset-class breakout (e.g., equities vs. fixed income/currencies/commodities/crypto), citing no intention to disclose such segmentation; this limits transparency for investors seeking product-level contribution details.
Regulatory and Legal Uncertainty for New Markets
While exploring new markets (e.g., sports/non-sports prediction/novel contracts), management noted unresolved regulatory and legal uncertainty that could constrain or delay entry and monetization in those potential growth areas.
Company Guidance
Management's guidance emphasized growing the firm's trading capital, investing in infrastructure and talent, and dynamically deploying incremental capital while maintaining the quarterly dividend of $0.24 per share; they reiterated a long‑term, through‑the‑cycle ANTI target of $10.0 million per day and a VES through‑the‑cycle target of $2.0 million per day. Key metrics cited to support that guidance included Q4 ANTI of $9.7M per day ($613M total) and full‑year 2025 ANTI of $8.6M per day ($2.1B), Market Making ANTI of $7.8M/day in Q4 ($6.7M/day for FY), VES at $2.0M/day in Q4 ($1.9M/day FY), adjusted EBITDA of $442M (72% margin) in Q4 and $1.4B (65% margin) for FY, adjusted EPS of $1.85 (Q4) and $5.73 (FY), a full‑year cash compensation ratio of 19%, and an increase in invested capital of ~$625M in 2025 (≈$448M in H2) with an average return of ~100% on that capital (management noted prior incremental returns could settle in the ~50–70% range and that total debt was increased by ~$300M to support capital expansion).Virtu Financial Financial Statement Overview
Summary
Strong profitability (TTM EBIT margin 79.74%, net margin 53.36%) and modest revenue growth (TTM 3.49%) are offset by meaningful balance-sheet and cash-flow risk: high leverage (D/E 5.73, low equity ratio) and a sharp decline in free cash flow growth (-34.98% TTM).Income Statement
Virtu Financial has demonstrated consistent revenue growth, with a TTM revenue growth rate of 3.49%. The company maintains strong profitability, evidenced by a high EBIT margin of 79.74% and a net profit margin of 53.36% in the TTM period. However, the gross profit margin has decreased significantly from previous years, indicating potential cost pressures or pricing challenges.75
Positive
Balance Sheet
The balance sheet shows a high debt-to-equity ratio of 5.73 in the TTM period, indicating significant leverage, which could pose financial risk. However, the return on equity is robust at 131.58%, suggesting effective use of equity to generate profits. The equity ratio is relatively low, reflecting a higher reliance on debt financing.60
Neutral
Cash Flow
The cash flow statement reveals a decline in free cash flow growth by 34.98% in the TTM period, which may impact liquidity. The operating cash flow to net income ratio is strong at 1.48, indicating good cash generation relative to net income. However, the free cash flow to net income ratio has decreased, suggesting potential challenges in maintaining cash flow levels.55
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.63B | 2.88B | 2.29B | 2.36B | 2.81B | 3.24B |
| Gross Profit | 2.17B | 1.77B | 1.39B | 1.35B | 1.69B | 2.09B |
| EBITDA | 1.80B | 1.39B | 1.05B | 1.01B | 1.35B | 1.74B |
| Net Income | 468.36M | 276.42M | 142.04M | 265.03M | 476.88M | 649.20M |
Balance Sheet | ||||||
| Total Assets | 20.15B | 15.36B | 14.47B | 10.58B | 10.32B | 9.97B |
| Cash, Cash Equivalents and Short-Term Investments | 4.25B | 872.51M | 820.44M | 981.58M | 1.07B | 889.56M |
| Total Debt | 3.98B | 5.71B | 6.93B | 3.73B | 3.60B | 3.43B |
| Total Liabilities | 18.18B | 13.87B | 13.06B | 8.93B | 8.46B | 8.11B |
| Stockholders Equity | 1.97B | 1.25B | 1.20B | 1.34B | 1.55B | 1.47B |
Cash Flow | ||||||
| Free Cash Flow | -45.09M | 544.68M | 415.65M | 679.60M | 1.15B | 1.00B |
| Operating Cash Flow | 9.00M | 598.99M | 491.78M | 706.80M | 1.17B | 1.06B |
| Investing Cash Flow | -37.78M | -61.85M | -94.48M | -29.53M | -87.35M | -2.56M |
| Financing Cash Flow | -144.36M | -469.56M | -585.03M | -735.75M | -957.86M | -839.92M |
Virtu Financial Technical Analysis
Positive
40.66
Price Trends
34.74
Positive
34.63
Positive
37.97
Positive
Market Momentum
1.23
Negative
80.56
Negative
90.44
Negative
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 40.66 is above the 20-day moving average (MA) of 35.42, above the 50-day MA of 34.74, and above the 200-day MA of 37.97, indicating a bullish trend. The MACD of 1.23 indicates Negative momentum. The RSI at 80.56 is Negative, neither overbought nor oversold. The STOCH value of 90.44 is Negative, 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 0 New Risks
Virtu Financial Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $5.87B | 24.40 | 51.98% | 3.69% | 51.19% | 456.59% | |
71 Outperform | $8.69B | 27.48 | 91.85% | 0.58% | 23.16% | 64.04% | |
70 Outperform | $6.27B | 28.67 | 15.88% | 1.66% | 3.96% | -20.33% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | $5.73B | 7.31 | 27.69% | 2.88% | 27.66% | 131.25% | |
67 Neutral | $6.26B | 26.63 | 19.30% | 1.63% | 12.77% | 36.43% | |
58 Neutral | $5.63B | 19.04 | 14.47% | ― | 32.53% | 13.38% |
* Financial Sector Average
VIRT
Virtu Financial
40.66
1.59
4.08%
SNEX
StoneX Group
112.24
39.23
53.73%
MKTX
Marketaxess Holdings
168.61
-48.56
-22.36%
PIPR
Piper Sandler
347.56
36.63
11.78%
MC
Moelis
71.73
-3.47
-4.61%
PJT
PJT Partners
174.41
10.47
6.39%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.