Virtu Financial, Inc. (VIRT): A Bull Case Theory

We came across a bullish thesis on Virtu Financial, Inc. on PPinvest’s Substack. In this article, we will summarize the bulls’ thesis on VIRT. Virtu Financial, Inc.'s share was trading at $37.49 as of January 28th. VIRT’s trailing and forward P/E were 8.13 and 9.23 respectively according to Yahoo Finance.

Virtu Financial, Inc. (NASDAQ: VIRT) is one of the world’s largest electronic market makers, providing liquidity across global exchanges and earning profits on every trade. The company leverages its proprietary technology and economies of scale to operate profitably in markets where others cannot, positioning it as a versatile counterpart to firms like Flow Traders but with broader exposure across equities, crypto, and FX.

Virtu’s business model has proven resilient, with Q3 2025 results exceeding expectations, reporting EPS of $1.05 and sales growth of 20%. The firm continues its aggressive share buyback program, which has been a key driver of EPS expansion and shareholder value. Despite its strong operational performance, the stock trades at an attractive P/E ratio below 7, suggesting significant upside potential, with a three-year target price of $65.90 reflecting nearly a 96% return in a market-crash-hedged scenario.

Virtu also provides an appealing dividend yield of approximately 2.9%, further enhancing the investment case. Regulatory risks, particularly surrounding “Payment for Order Flow” (PFOF) in the U.S., and sensitivity to market volumes, remain important considerations, though the company’s technological edge and diversified trading footprint help mitigate some of these concerns.

Overall, Virtu Financial represents a unique opportunity for investors seeking exposure to electronic market making with strong profitability, robust cash generation, and a highly scalable business model. The combination of an undervalued stock, aggressive capital return programs, and potential upside from continued operational outperformance creates a compelling risk/reward profile for both equity and income-focused investors, making it a standout in the fintech and trading technology space.

Previously, we covered a bearish thesis on MarketAxess Holdings Inc. (MKTX) by Dan in November 2024, which highlighted strong Q3 revenue growth, rising EPS, and strategic partnerships, but noted operational inefficiencies and pressures in U.S. markets as reasons for limited upside. MKTX’s stock price has depreciated by approximately 36.94% since our coverage as the thesis played out. Dan shares an identical view in the new thesis but emphasizes portfolio and block trading issues more prominently.

Virtu Financial, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held VIRT at the end of the third quarter which was 33 in the previous quarter. While we acknowledge the potential of VIRT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.