Virtu Financial stock price is nearing its all-time high as hopes of friendly regulations in the United States continues. VIRT was trading at $37.25, a few points below the all-time high of $38.25 ahead of the upcoming earnings. So, is Virtu a good market maker stock to buy?
VIRT stock and regulations
Virtu Financial is a leading American company that many people have never heard of. However, millions of Americans indirectly use its services most weekdays whenever they buy and sell stock using popular companies like Robinhood and Schwab.
Virtu Financial is one of the biggest money makers in the US, and it competes with Citadel and Susquehanna. The company executes billions of orders daily and takes a small cut, through a process known as Payment for Order Flow (PfOF).
PfOF is what enables firms like Robinhood and Schwab to offer trading services without taking commissions. It is also a highly controversial business that the SEC, under Gary Gensler, wanted to change. These new policies will likely be put on ice now that the SEC will have a change of guard.
Virtu Finance earnings ahead
The next important catalyst for the Virtu Finance stock price will be the upcoming earnings scheduled on Friday.
Its most recent financial results showed that its revenue increased by 12% in the third quarter to $706 million. This growth was mostly because of the trading revenue, which jumped by 40% to $444 million.
Virtu’s market making segment made $576 million, while its execution division had $125 million, bringing the total amount to $706 million.
Its net income rose slightly from $117 million to $119 million. The nine-month net profit rose to $359 million.
This performance was mostly because American stocks did well in 2024 with the S&P 500 and Nasdaq 100 indices having over 20% gains during the year. While market-making is an all-weather business, companies like Virtu do well when the stock market is in a bull market.
Analysts are optimistic that the upcoming results will be strong. The average estimate is that the revenue will be $391 million, a 50% increase from the same period a year earlier.
They expect the full-year results to be $1.52 billion, followed by $1.56 billion this year. Virtu Finance has a good record of delivering strong results than expected.
Virtu’s profits are expected to keep growing, with the average earnings per share estimate being $3.25 followed by $3.29 in 2025.
The company is also seen as being undervalued. It has a forward price-to-earnings ratio (PE) of 14.18 and a PEG ratio of 0.82. These numbers are significantly lower than the broader market.
Virtu Financial stock price analysis
The weekly chart shows that the VIRT share price peaked at $38.25 in December and then retreated and retested the key support at $34.18. This was an important level since it was also the highest point in April 2021. Notably, it was the upper side of the cup and handle pattern, a highly popular continuation sign.
As such, Virtu Financial stock has formed a break and retest, pointing to more gains ahead. It has also formed a bullish flag pattern.
If this C&H pattern works out well, the stock will likely rise and retest the key resistance at $52.60. This target is based on the cup’s death, which is then extrapolated from its upper side.
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