- Virtu Financial continues to scale with high incremental margins, driving its EPS "floor" higher to a somewhat conservative $2/share.
- Its growth initiatives have also been trending well, with the option market-making opportunity likely to prove particularly lucrative.
- Regulatory changes are a key risk, but given recent proposals have focused on transparency and execution, Virtu is positioned to benefit.
- A 13x valuation multiple on the underlying earnings power would yield a fair value into the $40s; in the meantime, investors get paid a well-covered ~5% fwd yield.
For further details see:
Virtu Financial: Value In The Volatility