Is Virtu Financial (VIRT) Stock Undervalued Right Now?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is Virtu Financial (VIRT). VIRT is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. VIRT has a P/S ratio of 1.46. This compares to its industry's average P/S of 2.36.

Finally, our model also underscores that VIRT has a P/CF ratio of 5.79. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 16.35. VIRT's P/CF has been as high as 9.71 and as low as 5.74, with a median of 7.60, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Virtu Financial is likely undervalued currently. And when considering the strength of its earnings outlook, VIRT sticks out as one of the market's strongest value stocks.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

Source Zacks-com