VIRT
Virtu Financial, Inc.
$64.43
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 21.9% below fair value
You pay
$64.43
Bear
$57.77
Fair
$82.52
Bull
$107.28
Bear
$57.77
-10.3%
ROTCE 20.0% → 4.00x TBV
Fair
$82.52
+28.1%
ROTCE 25.0% → 4.00x TBV
Bull
$107.28
+66.5%
ROTCE 30.0% → 4.00x TBV
Adjust Assumptions
168.2%
7.6%
Key Value Driver
ROTCE (168.2%) vs. cost of equity (7.6%)
Implied Market Multiple
19.87x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (13 analysts)
$63.33
Divergence from AlphaVal
30%
Summary
With ROTCE of 168.2% vs. 7.6% cost of equity, fair P/TBV is 4.00x on $3.24 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 $63.33 (from 13 analysts). Our estimate is 30% 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