Earnings Estimates Moving Higher for Virtu Financial (VIRT): Time to Buy?
Zacks Investment Research | Jun 04, 2021 12:20AM ET
Virtu Financial (NASDAQ:VIRT) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.
Analysts' growing optimism on the earnings prospects of this high-speed trading company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance , with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
For Virtu Financial, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.
The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:
12 Month EPS
Current-Quarter Estimate Revisions
The earnings estimate of $0.82 per share for the current quarter represents a change of -52.33% from the number reported a year ago.
Over the last 30 days, one estimate has moved higher for Virtu Financial while one has gone lower. As a result, the Zacks Consensus Estimate has increased 6.49%.
Current-Year Estimate Revisions
The company is expected to earn $4.20 per share for the full year, which represents a change of -27.08% from the prior-year number.
In terms of estimate revisions, the trend for the current year also appears quite encouraging for Virtu Financial. Over the past month, two estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 11.33%.
Favorable Zacks Rank
The promising estimate revisions have helped Virtu Financial earn a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Get The News You Want
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
Bottom Line
While strong estimate revisions for Virtu Financial have attracted decent investments and pushed the stock 11.1% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.
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