VIRT
Virtu Financial, Inc.
$56.51
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 31.5% below fair value
You pay
$56.51
Bear
$57.77
Fair
$82.52
Bull
$107.28
Bear
$57.77
+2.2%
ROTCE 20.0% → 4.00x TBV
Fair
$82.52
+46.0%
ROTCE 25.0% → 4.00x TBV
Bull
$107.28
+89.8%
ROTCE 30.0% → 4.00x TBV
Adjust Assumptions
168.2%
7.9%
Key Value Driver
ROTCE (168.2%) vs. cost of equity (7.9%)
Implied Market Multiple
17.92x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (13 analysts)
$63.00
Divergence from AlphaVal
31%
Summary
With ROTCE of 168.2% vs. 7.9% cost of equity, fair P/TBV is 4.00x on $3.15 tangible book, implying $82.52 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Wall Street's average price target is $63.00 (from 13 analysts). Our estimate is 31% above the consensus -- consider that gap carefully.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly