What is the market’s view of VIRTU FINANCIAL INC’s future operating performance as reflected in the current price of $21? Over the next 6 years, VIRTU FINANCIAL INC shares will need to reach $34 to achieve average annual stock market performance of 9.0%. VIRTU FINANCIAL INC’s stock price will need to reach $41 by 2029 to achieve upper quartile performance.
Executive Summary
- Price Target Research identifies VIRTU FINANCIAL INC as having: high expected growth, high financial strength, stability, and average profitability. A big positive influence on VIRTU FINANCIAL INC’s valuation is its superior Risk Profile.
- Very high valuation, average shareholder returns. Current valuation levels are very high relative to the VIRTU FINANCIAL INC Peer Group. Recent market returns have tracked the VIRTU FINANCIAL INC Peer Group. Total shareholder returns expected to significantly beat the overall equity market. Based on current investor expectations, VIRTU FINANCIAL INC shares should reach a level of $88 by 2029 — an 31.1% per year total shareholder return. A 2029 stock price of $34 would reflect median performance and a price of $41 would be required to reach upper quartile performance.
- VIRTU FINANCIAL INC’s achieved growth is average. Historical growth has been average relative to the VIRTU FINANCIAL INC Peer Group and forecasted growth is relatively very high. Asset Growth has been superior. Revenue Growth has lagged. VIRTU FINANCIAL INC’s historical income statement growth has been lower than balance sheet growth. Revenue growth has fallen short of asset growth; earnings growth has fallen short of equity growth driving erosion in return on equity. VIRTU FINANCIAL INC’s consensus growth expectations are higher than historical growth.
- Asset Turnover is group leading. This factor has strengthened market perceptions of VIRTU FINANCIAL INC. The company has very high excess cash and will have to work to reinvest at attractive returns to support profitability and valuation.
- Risk Profile has been VIRTU FINANCIAL INC’s biggest valuation strength. VIRTU FINANCIAL INC’s risk profile is favorable. Overall variability has been relatively low with relatively low revenue variability, above average E.P.S. variability, and very low stock price volatility. Financial Strength is relatively very high and earnings’ expectations are very low. The debt/capital ratio has risen.
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