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Here's Why You Should Retain Virtu Financial (VIRT) Stock Now
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Virtu Financial, Inc. (VIRT - Free Report) is well positioned for growth, supported by its diversified business, strategic partnerships and effective cost-control measures. The current high-interest rate environment further contributes to the company's interest and dividend income.
Headquartered in New York, Virtu Financial is a leading financial services company. It has a market cap of $3.3 billion. Over the past six months, shares of Virtu Financial have gained 23.4%, outperforming the industry’s 9.8% rise. Courtesy of solid prospects, this Zacks Rank #3 (Hold) stock is worth retaining at the moment.
Let’s delve deeper.
The Zacks Consensus Estimate for VIRT’s full-year 2023 earnings is pegged at $2.05 per share, which remained stable over the past week. The consensus mark for the 2024 bottom line is pegged at $2.42 per share. Virtu Financial beat on earnings in two of the last four quarters and missed twice. This is depicted in the graph below.
The Zacks Consensus Estimate for 2023 adjusted net trading income is pegged at more than $1.2 billion. The consensus mark for 2024 indicates a 4.8% year-over-year increase. Accumulating strength in the Market Making segment is expected to be a major growth driver.
The ITG buyout of 2019 diversified its revenues from the Execution Services segment. It is likely to gain from new partnerships and alliances. Its Triton Valor execution management system has been deployed by Groupama Asset Management for trading fixed income in October 2023. In September, it collaborated with Sumitomo Mitsui Trust Asset Management.
The Market Making segment is expected to continue benefiting from the InvestorLink collaboration in August 2023. The partnership enables Virtu Financial’s retail brokers to get directly connected to primary capital markets.
The company’s efforts to reduce costs are expected to benefit its profit level. Its total operating expenses declined 2.3% in 2021 and 0.4% in 2022. Our estimate for 2023 net brokerage, exchange, clearance fees and payments for order flow indicates a 16.5% year-over-year reduction. We expect a further 6.2% decline in 2024.
The company’s balance sheet strength enables it to make shareholder-friendly moves. In the last reported quarter, it bought back shares worth $48.8 million and had $136.3 million remaining under its share buyback authorization at the third-quarter end. Also, this dividend-paying company has a dividend yield of 4.6%, higher than the industry average of 2.2%.
Key Risks
There are a few factors that investors should keep an eye on.
With the market stabilizing, Virtu Financial’s performance might suffer as it gains traction from market volatility. Also, during the trailing 12-month period, its free cash flow declined 23.9%, following a 42.3% decrease in 2022. Nevertheless, we believe that a systematic and strategic plan of action will drive its growth in the long term.
The consensus mark for Alerus Financial’s 2023 full-year earnings is pegged at $1.60 per share, which remained stable over the past week. ALRS beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 16.6%.
The Zacks Consensus Estimate for Burford Capital’s 2023 full-year earnings has improved 16% over the past 60 days. Also, the consensus mark for BUR’s revenues in full-year 2023 is pegged at $936 million, suggesting 193.2% year-over-year growth.
The Zacks Consensus Estimate for FlexShopper’s 2023 full-year earnings has improved 21.9% in the past 60 days. It has witnessed one upward estimate revision against none in the opposite direction during this time. The consensus mark for FPAY’s revenues for full-year 2023 is pegged at $114.8 million, suggesting 1.5% year-over-year growth.
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Here's Why You Should Retain Virtu Financial (VIRT) Stock Now
Virtu Financial, Inc. (VIRT - Free Report) is well positioned for growth, supported by its diversified business, strategic partnerships and effective cost-control measures. The current high-interest rate environment further contributes to the company's interest and dividend income.
Headquartered in New York, Virtu Financial is a leading financial services company. It has a market cap of $3.3 billion. Over the past six months, shares of Virtu Financial have gained 23.4%, outperforming the industry’s 9.8% rise. Courtesy of solid prospects, this Zacks Rank #3 (Hold) stock is worth retaining at the moment.
Let’s delve deeper.
The Zacks Consensus Estimate for VIRT’s full-year 2023 earnings is pegged at $2.05 per share, which remained stable over the past week. The consensus mark for the 2024 bottom line is pegged at $2.42 per share. Virtu Financial beat on earnings in two of the last four quarters and missed twice. This is depicted in the graph below.
Virtu Financial, Inc. Price and EPS Surprise
Virtu Financial, Inc. price-eps-surprise | Virtu Financial, Inc. Quote
The Zacks Consensus Estimate for 2023 adjusted net trading income is pegged at more than $1.2 billion. The consensus mark for 2024 indicates a 4.8% year-over-year increase. Accumulating strength in the Market Making segment is expected to be a major growth driver.
The ITG buyout of 2019 diversified its revenues from the Execution Services segment. It is likely to gain from new partnerships and alliances. Its Triton Valor execution management system has been deployed by Groupama Asset Management for trading fixed income in October 2023. In September, it collaborated with Sumitomo Mitsui Trust Asset Management.
The Market Making segment is expected to continue benefiting from the InvestorLink collaboration in August 2023. The partnership enables Virtu Financial’s retail brokers to get directly connected to primary capital markets.
The company’s efforts to reduce costs are expected to benefit its profit level. Its total operating expenses declined 2.3% in 2021 and 0.4% in 2022. Our estimate for 2023 net brokerage, exchange, clearance fees and payments for order flow indicates a 16.5% year-over-year reduction. We expect a further 6.2% decline in 2024.
The company’s balance sheet strength enables it to make shareholder-friendly moves. In the last reported quarter, it bought back shares worth $48.8 million and had $136.3 million remaining under its share buyback authorization at the third-quarter end. Also, this dividend-paying company has a dividend yield of 4.6%, higher than the industry average of 2.2%.
Key Risks
There are a few factors that investors should keep an eye on.
With the market stabilizing, Virtu Financial’s performance might suffer as it gains traction from market volatility. Also, during the trailing 12-month period, its free cash flow declined 23.9%, following a 42.3% decrease in 2022. Nevertheless, we believe that a systematic and strategic plan of action will drive its growth in the long term.
Better-Ranked Players
Investors interested in the broader Finance space can look at some better-ranked stocks like Alerus Financial Corporation (ALRS - Free Report) , Burford Capital Limited (BUR - Free Report) and FlexShopper, Inc. (FPAY - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for Alerus Financial’s 2023 full-year earnings is pegged at $1.60 per share, which remained stable over the past week. ALRS beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 16.6%.
The Zacks Consensus Estimate for Burford Capital’s 2023 full-year earnings has improved 16% over the past 60 days. Also, the consensus mark for BUR’s revenues in full-year 2023 is pegged at $936 million, suggesting 193.2% year-over-year growth.
The Zacks Consensus Estimate for FlexShopper’s 2023 full-year earnings has improved 21.9% in the past 60 days. It has witnessed one upward estimate revision against none in the opposite direction during this time. The consensus mark for FPAY’s revenues for full-year 2023 is pegged at $114.8 million, suggesting 1.5% year-over-year growth.