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Why Is Virtu Financial (VIRT) Up 6.6% Since Last Earnings Report?
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A month has gone by since the last earnings report for Virtu Financial (VIRT - Free Report) . Shares have added about 6.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Virtu Financial due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Virtu Financial’s fourth-quarter 2020 earnings per share of $1.18 beat the Zacks Consensus Estimate of 81 cents by 45.7%. Moreover, the bottom line skyrocketed 337% year over year on the back of reduced costs and higher revenues.
Operating revenues of $456 million too increased 77.4% year over year, driven by a gain on the sale of MATCHNow as well as heightened levels of volatility, bid-ask spreads and trading volumes across global markets and asset classes as a result of the COVID-19 pandemic. Moreover, the top line beat the consensus mark by 27.4%.
Quarterly Operational Update
Adjusted trading income of the company surged 77.3% to $455.9 million year over year.
In the quarter under review, adjusted EBITDA jumped 200.1% to $343.9 million.
Total operating expenses dipped 2.3% year over year to $417 million. This was on the back of employee compensation and payroll taxes, interest and dividends expense, operations and administrative costs, debt issue cost related to debt refinancing, prepayment and commitment fees, and transaction advisory fees and expenses, etc.
Segmental Update
Adjusted net trading income from the Marketing Making segment rose 112% year over year to $320.8 million in the quarter under review. In this segment, adjusted net trading income from Global Equities soared 122.3% year over year to $427.9 million while the same from Global FICC, Options and Other climbed 7% year over year to $38 million.
Adjusted net trading income from Execution Services came in at $39.5 million, comparing favorably with the year-ago quarter’s figure of $0.6 million.
Dividend and Share Repurchase Update
The company's board of directors declared a quarterly cash dividend of 24 cents per share to be paid out on Mar 15, 2020 to its shareholders of record as of Mar 1.
The board members also approved a $100-million share buyback plan comprising Class A common stock and common units of Virtu Financial LLC through Dec 31, 2021.
Further, the board sanctioned the enhancement of the share buyback plan by increasing the total amount authorized by $70 million to $170 million in January 2021.
Financial Update
As of Dec 31, 2020, the company had total assets worth $10 billion, up 4.9% from the level at 2019 end.
It exited the fourth quarter with total equity of $1.8 billion, up 50.9% from the level on Dec 31, 2019.
The company exited the fourth quarter with $889.5 million of cash and cash equivalents, up 21.5% from the 2019-end level.
In the quarter under review, long-term borrowings dropped 14.5% to $1.6 billion from the level at 2019 end.
Full-Year Update
Total revenues for the year stood at $3.2 billion, up 113.5% year over year. Adjusted net trading income of the company shot up 133% year over year to $2.2 billion.
Adjusted EPS for 2020 was $5.16 against the 2019 loss of 53 cents per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 75.75% due to these changes.
VGM Scores
At this time, Virtu Financial has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Virtu Financial has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Virtu Financial (VIRT) Up 6.6% Since Last Earnings Report?
A month has gone by since the last earnings report for Virtu Financial (VIRT - Free Report) . Shares have added about 6.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Virtu Financial due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Virtu Financial's Q4 Earnings Beat Estimates, Rise Y/Y
Virtu Financial’s fourth-quarter 2020 earnings per share of $1.18 beat the Zacks Consensus Estimate of 81 cents by 45.7%. Moreover, the bottom line skyrocketed 337% year over year on the back of reduced costs and higher revenues.
Operating revenues of $456 million too increased 77.4% year over year, driven by a gain on the sale of MATCHNow as well as heightened levels of volatility, bid-ask spreads and trading volumes across global markets and asset classes as a result of the COVID-19 pandemic. Moreover, the top line beat the consensus mark by 27.4%.
Quarterly Operational Update
Adjusted trading income of the company surged 77.3% to $455.9 million year over year.
In the quarter under review, adjusted EBITDA jumped 200.1% to $343.9 million.
Total operating expenses dipped 2.3% year over year to $417 million. This was on the back of employee compensation and payroll taxes, interest and dividends expense, operations and administrative costs, debt issue cost related to debt refinancing, prepayment and commitment fees, and transaction advisory fees and expenses, etc.
Segmental Update
Adjusted net trading income from the Marketing Making segment rose 112% year over year to $320.8 million in the quarter under review. In this segment, adjusted net trading income from Global Equities soared 122.3% year over year to $427.9 million while the same from Global FICC, Options and Other climbed 7% year over year to $38 million.
Adjusted net trading income from Execution Services came in at $39.5 million, comparing favorably with the year-ago quarter’s figure of $0.6 million.
Dividend and Share Repurchase Update
The company's board of directors declared a quarterly cash dividend of 24 cents per share to be paid out on Mar 15, 2020 to its shareholders of record as of Mar 1.
The board members also approved a $100-million share buyback plan comprising Class A common stock and common units of Virtu Financial LLC through Dec 31, 2021.
Further, the board sanctioned the enhancement of the share buyback plan by increasing the total amount authorized by $70 million to $170 million in January 2021.
Financial Update
As of Dec 31, 2020, the company had total assets worth $10 billion, up 4.9% from the level at 2019 end.
It exited the fourth quarter with total equity of $1.8 billion, up 50.9% from the level on Dec 31, 2019.
The company exited the fourth quarter with $889.5 million of cash and cash equivalents, up 21.5% from the 2019-end level.
In the quarter under review, long-term borrowings dropped 14.5% to $1.6 billion from the level at 2019 end.
Full-Year Update
Total revenues for the year stood at $3.2 billion, up 113.5% year over year.
Adjusted net trading income of the company shot up 133% year over year to $2.2 billion.
Adjusted EPS for 2020 was $5.16 against the 2019 loss of 53 cents per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 75.75% due to these changes.
VGM Scores
At this time, Virtu Financial has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Virtu Financial has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.