Virtu Financial Inc-Class A (NYSE:VIRT) Emerges as a High-Growth Momentum Stock with Strong Earnings and Technical Breakout Potential

Virtu Financial Inc-Class A (NYSE:VIRT) has become an attractive option for investors focused on high-growth momentum, blending strong earnings improvement with a positive technical outlook. The stock was selected using a screen that looks for securities with a High Growth Momentum (HGM) Rating above 4, a Technical Rating above 7, and a Setup Rating above 7, criteria aimed at finding stocks with notable earnings momentum, solid technical conditions, and patterns suggesting potential breakout chances. This method matches strategies such as CANSLIM and Minervini, which highlight growth improvement, rising price trends, and clear entry points.

Why VIRT Matches the High Growth Momentum Criteria

The ChartMill High Growth Momentum Rating assesses various growth and earnings quality measures, and VIRT earns a 7 out of 10. Key elements behind this score include:

• Strong Earnings Improvement:

  • EPS Growth (TTM): +107.4% year-over-year.
  • Recent Quarterly EPS Growth: +84.3% (current quarter vs. prior year), after earlier quarters with growth rates of +71.1%, +322.2%, and +82.2%.
  • Next Quarter EPS Growth (Estimate): +24.0%, showing continued, though slower, growth.
  • Reliable Earnings Surprises: The company has exceeded EPS estimates in each of the last four quarters by an average of 16.9%.

• Notable Revenue Growth:

  • Revenue Growth (TTM): +25.4% year-over-year.
  • Recent Quarterly Sales Growth: +33.1%, following earlier quarters with +30.4%, +55.7%, and +12.2% growth.

• Better Profitability:

  • Profit Margin Improvement: Latest quarter profit margin of 11.1%, up from 10.5% in the prior quarter and 7.9% two quarters ago.
  • Free Cash Flow Growth: +27.5% over the past year, supporting earnings quality.

• Upward Analyst Adjustments:

  • Next Year EPS Estimate Changes: Up 15.9% over the past three months, reflecting growing confidence in future results.

These figures highlight VIRT’s capacity to produce improving earnings, a key trait of high-growth momentum stocks.

Technical Health and Setup Quality

Beyond fundamentals, VIRT displays a technically sound profile with a Technical Rating of 7 and a Setup Rating of 8, as outlined in the ChartMill Technical Report. Key points include:

• Solid Relative Performance: Over the past year, VIRT has surpassed 80% of stocks, with a 45.4% increase.
• Consolidation Pattern: The stock has moved within a range of $41.09 to $45.77 over the past month, with lower volatility, a typical setup for a possible breakout.
• Support and Resistance Levels:
  • Support: Firm support at $42.43, reinforced by multiple trendlines.
  • Resistance: Key resistance areas at $42.53-$43.69 (short-term) and $44.52-$45.13 (next challenge).
• Moving Averages: The stock is above its 50-day ($42.90), 100-day ($41.04), and 200-day ($38.53) SMAs, confirming a positive long-term trend.

The setup indicates a possible entry point above $43.70, with a stop-loss just below $42.42, presenting a good risk-reward balance.

Summary: A High-Growth Momentum Option with Technical Support

Virtu Financial’s mix of strong earnings momentum, better margins, and a technically favorable setup makes it a notable choice for growth-oriented investors. The stock’s track record of exceeding estimates while receiving upward revisions strengthens its growth path, while the technical structure offers a clear entry opportunity.

For investors looking for similar high-growth momentum stocks with breakout potential, more options can be found using the High Growth Momentum Breakout Setups Screen.

Disclaimer: This article is not investment advice. Always perform your own research and apply risk management strategies before making any trading decisions.