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Virtu Financial (VIRT) Up 49% in Six Months: More Room to Run?

·4 min read

Shares of Virtu Financial, Inc. VIRT have gained 49.4% in the past six months against the industry’s decline of 4.2% and outperformed the Finance sector’s rise of 0.5%. The S&P 500 composite index has dipped 0.1% in the same time frame. With a market capitalization of $3.8 billion, the average volume of shares traded in the last three months was 1.1 million.

A well-diversified suite, several product launches, lower expenses and a sound financial position continue to drive Virtu Financial’s performance.

This currently Zacks Rank #1 (Strong Buy) leading financial firm has a decent surprise history of beating on earnings in three of the trailing four quarters and missing on the same once.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Can VIRT Retain the Momentum?

The Zacks Consensus Estimate for 2022 earnings has moved 22.4% north, while the same for 2023 has moved up 12.4% in the past 60 days, reflecting analysts’ optimism on the stock.

Virtu Financial boasts a solid integrated analytics platform to extend a suite of pre- and post-trade services, data products and compliance tools to its clients. VIRT’s product suite allows customers to trade in multiple asset classes across several venues stretched in more than 50 countries and that too at affordable trading costs. The diversified product suite along with technology and operational efficiencies are expected to boost the business scale of VIRT worldwide.

VIRT’s revenues are mostly generated through market making activities. The Market Making segment continues to account for the majority portion of the overall trading income of Virtu Financial. VIRT also resorted to launch several products, backed by liquidity and risk management capabilities to benefit its clients. These might act as a tailwind for boosting the customer base of the financial firm.

Virtu Financial pursues disciplined expense management efforts, which not only help declining operating expenses but also continue providing an impetus to its margins. In 2021, operating expenses slipped 2.3% year over year. VIRT continues to reap expense synergies, stemming from its Investment Technology Group buyout in 2019.

VIRT boasts a solid financial standing on increasing cash balance and sturdy cash-generating abilities. Virtu Financial exited 2021, witnessing 20.4% year-over-year growth in cash and cash equivalents. VIRT generated cash from operations worth $1.2 billion last year, which grew 10.4% year over year.

Solid Dividend History

Banking on a solid cash flow, Virtu Financial has uninterruptedly paid dividends for the past 27 quarters. The dividend yield is 2.6%, better than the industry average of 2%, thus making the stock an attractive pick for yield-seeking investors.

Other Stocks to Consider

Some other top-ranked stocks in the finance space are MVB Financial Corp. MVBF, Axos Financial, Inc. AX and Alerus Financial Corporation ALRS. While MVB Financial flaunts a Zacks Rank #1, Axos Financial and Alerus Financial carry a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

MVB Financial delivered a trailing four-quarter earnings surprise of 73.73%, on average. The Zacks Consensus Estimate for MVBF’s 2022 earnings has moved 58.9% north in the past 30 days. MVB Financial has a Momentum Score of A.

The bottom line of Axos Financial outpaced estimates in each of the last four quarters, the average being 9.62%. The Zacks Consensus Estimate for AX’s 2022 earnings suggests an improvement of 8.7%, while the same for revenues suggests growth of 9.8% from the corresponding year-ago reported figures. The consensus mark for 2022 earnings has moved 2.3% north in the past 60 days. Axos Financial has a Value Score of A.

Alerus Financial outpaced estimates in each of the last four quarters, the average being 34.56%. The Zacks Consensus Estimate for ALRS’s 2022 earnings has moved 7.9% north in the past 30 days. Alerus Financial has a Value Score of B.

Shares of MVB Financial, Axos Financial and Alerus Financial have lost 1.8%, 2.9% and 3.7%, respectively, in the past six months.

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Virtu Financial, Inc. (VIRT) : Free Stock Analysis Report

Mvb Financial Corp. (MVBF) : Free Stock Analysis Report

AXOS FINANCIAL, INC (AX) : Free Stock Analysis Report

Alerus Financial (ALRS) : Free Stock Analysis Report

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Zacks Investment Research