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Why Is Virtu Financial (VIRT) Down 5.5% 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 lost about 5.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Virtu Financial due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Virtu Financial's Q2 Earnings Miss Mark, Decrease Y/Y
Virtu Financial's second-quarter 2021 earnings per share of 63 cents miss the Zacks Consensus Estimate of 75 cents by 16% due to lower revenues. The bottom line also decreased 63.4% year over year.
The company witnessed muted activity and soft market volumes in the second quarter.
Operating revenues of $342 million declined 48.9% year over year due to weak trading volume in U.S. equities. The top line also missed the consensus mark by 5%.
Quarterly Operational Update
In the quarter under review, adjusted EBITDA plunged 59.4% to $197.3 million.
Total operating expenses dropped 17.4% year over year to $413.9 million. This is driven by lower communication and data processing, employee compensation and payroll taxes, interest and dividends expense and a lower debt issue cost related to debt refinancing, prepayment and commitment fees.
Segmental Update
Adjusted net trading income from the Marketing Making segment was down 48.9% year over year to $380.6 million in the quarter under review.
Adjusted net trading income from Execution Services came in at $4.18 million against the year-ago quarter’s negative $0.68 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 Sep 15, 2021 to its shareholders of record as of Sep 1.
The company bought back shares worth $101.3 million under the share repurchase program.
Virtu Financial now has $242.1 million left under its share buyback authorization for future purchases of shares of Class A Common Stock and Virtu Financial Units.
Financial Update (as of Jun 30, 2021)
The company had total assets worth $10.3 billion, up 3.8% from the level at 2020 end.
It exited the June quarter with total equity of $1.9 billion, up 3.7% from the level on Dec 31, 2020.
The company exited the second quarter with $848.1 million in cash and cash equivalents, down 4.7% from the 2020-end level.
In the quarter under review, long-term borrowings dipped 2.2% to $1.6 billion from the level at 2020 end.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -6.69% due to these changes.
VGM Scores
Currently, Virtu Financial has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Virtu Financial has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Why Is Virtu Financial (VIRT) Down 5.5% Since Last Earnings Report?
A month has gone by since the last earnings report for Virtu Financial (VIRT - Free Report) . Shares have lost about 5.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Virtu Financial due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Virtu Financial's Q2 Earnings Miss Mark, Decrease Y/Y
Virtu Financial's second-quarter 2021 earnings per share of 63 cents miss the Zacks Consensus Estimate of 75 cents by 16% due to lower revenues. The bottom line also decreased 63.4% year over year.
The company witnessed muted activity and soft market volumes in the second quarter.
Operating revenues of $342 million declined 48.9% year over year due to weak trading volume in U.S. equities. The top line also missed the consensus mark by 5%.
Quarterly Operational Update
In the quarter under review, adjusted EBITDA plunged 59.4% to $197.3 million.
Total operating expenses dropped 17.4% year over year to $413.9 million.
This is driven by lower communication and data processing, employee compensation and payroll taxes, interest and dividends expense and a lower debt issue cost related to debt refinancing, prepayment and commitment fees.
Segmental Update
Adjusted net trading income from the Marketing Making segment was down 48.9% year over year to $380.6 million in the quarter under review.
Adjusted net trading income from Execution Services came in at $4.18 million against the year-ago quarter’s negative $0.68 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 Sep 15, 2021 to its shareholders of record as of Sep 1.
The company bought back shares worth $101.3 million under the share repurchase program.
Virtu Financial now has $242.1 million left under its share buyback authorization for future purchases of shares of Class A Common Stock and Virtu Financial Units.
Financial Update (as of Jun 30, 2021)
The company had total assets worth $10.3 billion, up 3.8% from the level at 2020 end.
It exited the June quarter with total equity of $1.9 billion, up 3.7% from the level on Dec 31, 2020.
The company exited the second quarter with $848.1 million in cash and cash equivalents, down 4.7% from the 2020-end level.
In the quarter under review, long-term borrowings dipped 2.2% to $1.6 billion from the level at 2020 end.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -6.69% due to these changes.
VGM Scores
Currently, Virtu Financial has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Virtu Financial has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.