Morgan Stanley has adjusted its outlook on Virtu Financial (VIRT, Financial), increasing the price target from $26 to $28. Despite this upward revision, the firm maintains an Underweight rating on the stock. The adjustment follows Virtu's first-quarter earnings report, prompting improvements in earnings forecasts. The firm's expectations for fiscal year 2025 earnings per share (EPS) have been revised upward by 2% to $3.30.
Looking further ahead, the anticipated EPS for fiscal year 2026 has been boosted by 11% to $3.43. These revisions reflect projections of higher revenues from ANTI and execution services. This demonstrates Morgan Stanley’s cautiously optimistic stance on Virtu's financial performance in the coming years, despite maintaining an Underweight rating.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 8 analysts, the average target price for Virtu Financial Inc (VIRT, Financial) is $42.00 with a high estimate of $48.00 and a low estimate of $28.00. The average target implies an upside of 7.42% from the current price of $39.10. More detailed estimate data can be found on the Virtu Financial Inc (VIRT) Forecast page.
Based on the consensus recommendation from 9 brokerage firms, Virtu Financial Inc's (VIRT, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Virtu Financial Inc (VIRT, Financial) in one year is $18.04, suggesting a downside of 53.86% from the current price of $39.1. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Virtu Financial Inc (VIRT) Summary page.
VIRT Key Business Developments
Release Date: April 23, 2025
- Normalized EPS: $1.30
- Total Adjusted Net Trading Income per Day: $8.3 million
- Quarterly EBITDA: $320 million
- EBITDA Margin: 64%
- Market Making Adjusted Net Trading Income: $382 million or $6.4 million per day
- Execution Services Adjusted Net Trading Income: $115 million or $1.9 million per day
- Adjusted Operating Expenses: $193 million
- Financing Interest Expense: $30 million
- Blended Interest Rate for Long Term Debt: Approximately 7.1%
- Share Repurchase: 1.3 million shares at an average price of $36.44 per share, totaling $48 million
- Quarter-End Share Count: 160.2 million shares outstanding
- Dividend: $0.24 per share
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Virtu Financial Inc (VIRT, Financial) reported a strong first quarter with $1.30 of normalized EPS and total adjusted net trading income per day of $8.3 million.
- The company's Market Making segment had its best quarter since 2021, driven by strong performances in global equities, digital assets, and ETF block Market Making.
- Virtu Execution Services (VES) achieved its seventh consecutive quarter of increasing net trading income, indicating strong growth potential.
- The company has successfully expanded its listed options business in Asia, India, and Japan, and is making strides in expanding its ETF Block business in Europe.
- Virtu Financial Inc (VIRT) continues to maintain an efficient cost structure and disciplined expense management, which has helped control operating expenses during an inflationary environment.
Negative Points
- Despite strong performance, the company acknowledges the inherent volatility in its business, which can impact future results.
- There is ongoing debate about the sustainability of retail participation, which could affect future market activity and revenue.
- The company faces competition in the outsourced trading business from firms like Citadel Securities and Jane Street, which could impact its market share.
- Virtu Financial Inc (VIRT) does not break out customer versus non-customer Market Making, making it difficult to assess the specific performance of these segments.
- The company's reliance on market volumes and volatility means that external factors beyond its control can significantly impact financial performance.
