A History of Outperforming Analyst Forecasts and Beating the Odds: Virtu Financial Inc. (VIRT)

Virtu Financial Inc. (NASDAQ: VIRT) stock jumped 8.55% on Friday to $23.24 against a previous-day closing price of $21.41. With 4.02 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.02 million shares. During the session, the Capital Markets company that operates in wider Financial sector, reached to the highest price of $23.74 whereas the lowest price it dropped to was $22.25. The 52-week range on VIRT shows that it touched its highest point at $38.63 and its lowest point at $20.90 during that stretch. It currently has a 1-year price target of $28.83. With its current market cap of 3.86 billion, VIRT has annualized dividend of $0.96 while the current yield stands at 4.13%. Beta for the stock currently stands at -0.08.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of VIRT was up-trending over the past week, with a rise of 3.94%, but this was down by -3.05% over a month. Three-month performance dropped to -3.61% while six-month performance fell -33.68%. The stock lost -4.01% in the past year, while it has lost -19.39% so far this year. A look at the trailing 12-month EPS for VIRT yields 3.24 with Next year EPS estimates of 3.26. For the next quarter, that number is 0.65. This implies an EPS growth rate of -24.30% for this year and -5.01% for next year. EPS is expected to decline by -2.71% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 36.20%.

Float and Shares Shorts:

At present, 104.96 million VIRT shares are outstanding with a float of 92.17 million shares on hand for trading. On Jul 14, 2022, short shares totaled 3.43 million, which was 3.26% higher than short shares on Jun 14, 2022. In addition to Mr. Douglas A. Cifu J.D. as the firm’s Co-founder, CEO & Director, Mr. Joseph A. Molluso serves as its Co-Pres & Co-COO.

Institutional Ownership:

Through their ownership of 90.19% of VIRT’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 98.93% of VIRT, in contrast to 48.49% held by mutual funds. Shares owned by individuals account for 42.12%. As the largest shareholder in VIRT with 9.95% of the stake, The Vanguard Group, Inc. holds 10,250,775 shares worth 10,250,775. A second-largest stockholder of VIRT, William Blair Investment Manageme, holds 7,113,723 shares, controlling over 6.90% of the firm’s shares. Renaissance Technologies LLC is the third largest shareholder in VIRT, holding 5,191,007 shares or 5.04% stake. With a 3.36% stake in VIRT, the Capitol Series Trust – Fuller & T is the largest stakeholder. A total of 3,460,910 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.86% of VIRT stock, is the second-largest Mutual Fund holder. It holds 2,951,512 shares valued at 67.77 million. Vanguard Small Cap Index Fund holds 2.46% of the stake in VIRT, owning 2,533,462 shares worth 58.17 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for VIRT since 7 analysts follow the stock currently. There are 3 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 3 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With VIRT analysts setting a high price target of $45.00 and a low target of $19.00, the average target price over the next 12 months is $28.71. Based on these targets, VIRT could surge 93.63% to reach the target high and fall by -18.24% to reach the target low. Reaching the average price target will result in a growth of 23.54% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. VIRT will report FY 2022 earnings on 02/07/2023. Analysts have provided yearly estimates in a range of $3.79 being high and $3.18 being low. For VIRT, this leads to a yearly average estimate of $3.44. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Virtu Financial Inc. surprised analysts by $0.03 when it reported $0.73 EPS against a consensus estimate of $0.70. The surprise factor in the prior quarter was $0.04. Based on analyst estimates, the high estimate for the next quarter is $0.81 and the low estimate is $0.47. The average estimate for the next quarter is thus $0.65.

Dividends & Yield:

In terms of dividends, VIRT has a current ratio of $0.96, which is $0.96 over the trailing 12-months, while a dividend of $0.96 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and VIRT currently yields $4.13. In the past year, VIRT’s dividend yield has been $4.13, but when looking at the stock over the past five years, its yield has been $4.14. Accordingly, VIRT has a current buyback yield of $25.48. This was $25.48 for the TTM, and it was $5.31 for the past five years.

Summary of Insider Activity:

Insiders traded VIRT stock several times over the past three months with 9 Buys and 0 Sells. In these transactions, 43,040 shares were bought while 0 shares were sold. The number of buy transactions has increased to 28 while that of sell transactions has risen to 27 over the past year. The total number of shares bought during that period was 489,680 while 26,411,700 shares were sold.

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