Virtu Financial, Inc. (VIRT) May Be Tasty For Bottom-Feeding Investors

Virtu Financial, Inc. (NASDAQ:VIRT) has been upgraded by Goldman, which now rates the stock as Buy versus Neutral prior rating, according to a note issued on January 04. Analysts at Compass Point, started covering the stock on September 19 with a Neutral rating. Analysts at Morgan Stanley, made their first call about the stock on August 08, recommending it is Equal-Weight. Jefferies, released new analyst coverage on May 23, calling the stock is Buy.

VIRT stock dropped -0.28% in recent trade and currently has a stock-market value of $4.83B. The shares finished at $25.19, after trading as low as $25.155 earlier in the session. It hit an intraday high Thursday at $25.5501. Trading activity significantly improved as the volume at ready counter increased to 772,392 shares versus 602,205 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 777,536 shares. The stock is now 28.19% above against its bear-market low of $19.65 on July 31, 2018. It has retreated -50.26% since it’s 52-week high of $37.85 reached in April. Now the market price is down -23.55% on the year and down -2.21% YTD.

Wall Street’s most bullish Virtu Financial, Inc. (NASDAQ:VIRT) analysts are predicting the share price to blow past $36 per share during the next 12 months. The current median share price forecast by them is $30, suggesting that the stock could increase 19.09% in that time frame. The average price target of $30.64 calls for a nearly 21.64% increase in the stock price.

Virtu Financial, Inc. (VIRT)’s 50 day simple moving average (SMA 50) price is $25.91 and its 200-day simple moving average (SMA 200) price is $24.84. The company’s stock currently has a total float of 106.78M shares. Its weekly volatility is hovering around 2.08% and felt 2.44% volatility in price over a month. On the upside, the share price will test short term resistance at around $25.44. On a downside, the stock is likely to find some support, which begins at $25.05. The failure to get near-term support could push it to $24.9.

When looking at valuations, Virtu Financial, Inc. (VIRT) has a cheap P/E of 9.03x as compared to industry average of 27.57x. Moreover, it trades for 12.37 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 2.55x price/book and 2.57x price/sales. Compared to others, Virtu Financial, Inc. is in a different league with regards to profitability, having net margins of 15.1%. To put some perspective around this, the industry’s average net margin is 39.85%. VIRT’s ROE is 27.8%, which is also considerably better than the industry’s ROE of 13.25%.

Shares of VIRT have dropped -1.8% since the company’s most recent earnings report. Over the past 9 fiscal quarters, Virtu Financial, Inc. (NASDAQ:VIRT) has topped consensus earnings estimates in 5 quarters (41%), missed earnings in 3 quarters (25%), whereas at 1 occasion EPS met analyst expectations. VIRT last reported earnings that exceeded expectations. The company raked in $0.67 per share, -91.05% change on the same period last year. That was better than consensus for $0.62. Revenue for the recent quarter stood at $299.2 million, up 26% on last year and above the $292.59 million predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $237.9 million to $248.52 million, which should be compared with $236.3 million generated last year. EPS is seen in a range of $0.32 to $0.52, against the $0.46 reported a year ago.