VIRT
Virtu Financial, Inc.
$52.47
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 35.4% below fair value
You pay
$52.47
Bear
$56.90
Fair
$81.28
Bull
$105.65
Bear
$56.90
+8.4%
ROTCE 20.0% → 4.00x TBV
Fair
$81.28
+54.9%
ROTCE 25.0% → 4.00x TBV
Bull
$105.65
+101.4%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (168.2%) vs. cost of equity (7.7%)
Implied Market Multiple
16.08x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $48.00 from 13 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $81.28 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 $48.00 (from 13 analysts). Our estimate is 87% 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