Have you been paying attention to shares of Virtu Financial (
VIRT Quick Quote VIRT - Free Report) ? Shares have been on the move with the stock up 15.3% over the past month. The stock hit a new 52-week high of $31.6 in the previous session. Virtu Financial has gained 23.4% since the start of the year compared to the 11% move for the Zacks Finance sector and the 7.2% return for the Zacks Financial - Miscellaneous Services industry. What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 11, 2021, Virtu Financial reported EPS of $1.18 versus consensus estimate of $0.81.
For the current fiscal year, Virtu Financial is expected to post earnings of $3.23 per share on $1.6 billion in revenues. This represents a -43.92% change in EPS on a -29.53% change in revenues. For the next fiscal year, the company is expected to earn $2.67 per share on $1.46 billion in revenues. This represents a year-over-year change of -17.26% and -8.85%, respectively.
Virtu Financial may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Virtu Financial has a Value Score of B. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 9.6X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 4.6X versus its peer group's average of 9X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Virtu Financial currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Virtu Financial fits the bill. Thus, it seems as though Virtu Financial shares could have a bit more room to run in the near term.
How Does Virtu Financial Stack Up to the Competition?
Shares of Virtu Financial have been moving higher, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also looking good, including Mvb Financial (
MVBF Quick Quote MVBF - Free Report) , Houlihan Lokey ( HLI Quick Quote HLI - Free Report) , and PJT Partners ( PJT Quick Quote PJT - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 43% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Virtu Financial, even beyond its own solid fundamental situation.