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Virtus Investment Partners (VRTS)
NYSE:VRTS

Virtus Investment Partners (VRTS) AI Stock Analysis

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Virtus Investment Partners

(NYSE:VRTS)

69Neutral
Virtus Investment Partners is moderately attractive, with strong revenue growth and a solid balance sheet. However, cash flow management remains a key challenge. The technical indicators suggest a bearish market sentiment, while the valuation is favorable. The recent earnings call and corporate event indicate both opportunities and challenges ahead, especially in the ETF market.
Positive Factors
Capital Allocation
Virtus repurchased approximately $15 million shares and increased an investment in an affiliate for approximately $29 million, demonstrating strong capital allocation.
Financial Performance
The company announced its seventh straight annual dividend increase and paid down approximately $11 million of debt, improving its leverage ratio to 0.1x EBITDA.
Negative Factors
Net Outflow
The company experienced approximately $1.7 billion of net outflow in Q3, primarily from Open-end funds and Institutional Accounts.

Virtus Investment Partners (VRTS) vs. S&P 500 (SPY)

Virtus Investment Partners Business Overview & Revenue Model

Company DescriptionVirtus Investment Partners, Inc. (VRTS) is a publicly traded asset management company that provides investment management products and services to individual and institutional clients. Based in the United States, Virtus operates through a multi-manager model, offering a diverse range of mutual funds, exchange-traded funds (ETFs), closed-end funds, and separately managed accounts. The company collaborates with affiliated managers and select unaffiliated subadvisers to deliver a broad spectrum of investment strategies across various asset classes, including equities, fixed income, and alternative investments.
How the Company Makes MoneyVirtus Investment Partners generates revenue primarily through management fees, which are calculated as a percentage of assets under management (AUM). These fees vary based on the type of investment product and the specific strategy employed. In addition to management fees, Virtus earns performance fees on certain investment products if specific performance targets are met. The company's revenue is significantly influenced by the performance of the financial markets, as fluctuations in market conditions can impact the value of AUM. Virtus also benefits from strategic partnerships with its affiliated managers and unaffiliated subadvisers, which enhance its product offerings and distribution capabilities. These collaborations help Virtus attract and retain clients, ultimately contributing to its revenue growth.

Virtus Investment Partners Financial Statement Overview

Summary
Virtus Investment Partners shows strong revenue growth and good profitability, but struggles with cash flow management. The balance sheet is healthy with no debt, which is a positive indicator of financial stability. However, cash flow issues suggest a need for improvement to support ongoing operations.
Income Statement
75
Positive
Virtus Investment Partners has shown consistent revenue growth with a notable increase from $841 million in 2023 to $906 million in 2024. The gross profit margin is strong at 100%, indicating efficient cost management. However, the net profit margin decreased slightly from 15.5% in 2023 to 13.4% in 2024, suggesting increased expenses or lower pricing power. The EBIT and EBITDA margins are stable, reflecting solid operational efficiency.
Balance Sheet
70
Positive
The company's balance sheet is robust with a debt-to-equity ratio of zero, indicating no debt burden. The equity ratio is approximately 22.5%, which shows moderate leverage but suggests potential for financial stability. Return on Equity (ROE) decreased from 15.1% in 2023 to 13.6% in 2024, which could indicate challenges in generating higher returns for shareholders.
Cash Flow
65
Positive
Operating cash flow has decreased significantly from $237 million in 2023 to $1.75 million in 2024. Free cash flow has also seen a similar decline. The operating cash flow to net income ratio and free cash flow to net income ratio are low, suggesting cash generation issues despite profitability. There is a need to improve cash flow management to support ongoing operations and investments.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
902.82M841.49M881.72M974.67M603.23M
Gross Profit
906.95M436.74M510.46M616.44M335.93M
EBIT
182.49M151.48M321.12M325.49M257.21M
EBITDA
182.49M433.77M321.51M474.08M300.08M
Net Income Common Stockholders
121.75M130.62M117.54M208.13M119.96M
Balance SheetCash, Cash Equivalents and Short-Term Investments
265.89M340.33M338.20M378.90M333.49M
Total Assets
3.99B3.68B3.95B3.93B3.47B
Total Debt
2.47B2.18B2.34B2.30B2.39B
Net Debt
2.07B1.84B2.00B1.92B2.06B
Total Liabilities
2.99B2.71B3.02B2.96B2.63B
Stockholders Equity
897.49M863.93M817.00M828.30M711.14M
Cash FlowFree Cash Flow
1.75M228.34M126.09M659.89M-227.15M
Operating Cash Flow
1.75M237.16M132.67M665.73M-226.10M
Investing Cash Flow
-16.95M-129.73M-27.47M-175.03M8.68M
Financing Cash Flow
74.95M-356.11M-102.06M-244.40M235.33M

Virtus Investment Partners Technical Analysis

Technical Analysis Sentiment
Negative
Last Price172.27
Price Trends
50DMA
195.97
Negative
100DMA
212.75
Negative
200DMA
211.47
Negative
Market Momentum
MACD
-5.95
Negative
RSI
33.73
Neutral
STOCH
12.96
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VRTS, the sentiment is Negative. The current price of 172.27 is below the 20-day moving average (MA) of 181.41, below the 50-day MA of 195.97, and below the 200-day MA of 211.47, indicating a bearish trend. The MACD of -5.95 indicates Negative momentum. The RSI at 33.73 is Neutral, neither overbought nor oversold. The STOCH value of 12.96 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VRTS.

Virtus Investment Partners Risk Analysis

Virtus Investment Partners disclosed 20 risk factors in its most recent earnings report. Virtus Investment Partners reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Virtus Investment Partners Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
JHJHG
74
Outperform
$5.94B14.128.74%4.14%18.85%7.96%
IVIVZ
71
Outperform
$6.82B12.955.31%5.38%3.97%
70
Outperform
$21.44B10.5220.60%5.15%9.80%17.87%
69
Neutral
$1.23B10.4213.82%4.72%5.54%-4.53%
BEBEN
66
Neutral
$10.31B30.092.76%6.37%9.48%-65.57%
64
Neutral
$13.79B10.529.20%4.24%17.25%-7.60%
AMAMG
63
Neutral
$4.69B10.6014.75%0.02%-6.77%-14.55%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
VRTS
Virtus Investment Partners
172.27
-53.13
-23.57%
AMG
Affiliated Managers
158.83
-2.04
-1.27%
BEN
Franklin Resources
18.92
-6.65
-26.01%
IVZ
Invesco
15.25
0.59
4.02%
TROW
T Rowe Price
92.04
-19.15
-17.22%
JHG
Janus Henderson Group
37.54
7.48
24.88%

Virtus Investment Partners Earnings Call Summary

Earnings Call Date: Jan 31, 2025 | % Change Since: -17.56% | Next Earnings Date: Apr 25, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed performance with significant growth in ETFs and an improved operating margin. However, these were offset by substantial net outflows and a decline in total assets under management. Continued positive momentum in ETFs and dividend increases suggest strategic growth, but challenges remain with institutional redemptions impacting overall results.
Highlights
Operating Margin Improvement
Operating margin reached 35.1%, the highest level since Q2 2022, up from 34.4% in the previous quarter.
Earnings Per Share Growth
Adjusted earnings per share increased by 8% from the previous quarter and grew 20% for the full year.
ETF Segment Growth
ETFs doubled in size over the past year to $3.1 billion, generating $0.5 billion in sales in Q4 alone.
Dividend Increase
Quarterly dividend raised by 18%, marking the seventh consecutive annual increase.
Lowlights
Net Outflows
Total net outflows of $4.8 billion in Q4, primarily due to a $3.3 billion partial institutional redemption.
Decline in Total Assets Under Management
Total assets under management declined by 5% sequentially to $175 billion due to net outflows and negative market performance.
Sales Decline
Sales decreased from $6.6 billion in Q3 to $6.4 billion in Q4 due to lower sales of U.S. retail funds.
Company Guidance
In the fourth quarter of fiscal year 2024, Virtus Investment Partners demonstrated strong financial performance despite experiencing net outflows, primarily due to a partial institutional redemption. Key metrics included an operating margin of 35.1%, the highest in two and a half years, and adjusted earnings per share of $7.50, marking an 8% increase from the prior quarter. Total assets under management (AUM) were reported at $175 billion as of December 31, 2024, down from $183.7 billion in the previous quarter, with total sales reaching $6.4 billion. The company introduced new products, notably in ETFs, which saw significant growth, doubling in size over the year to $3.1 billion and generating $0.5 billion in sales in Q4 alone. Additionally, Virtus continued capital returns through share repurchases, settling over 250,000 shares valued at $57 million, and raised the quarterly dividend by 18%.

Virtus Investment Partners Corporate Events

Executive/Board Changes
Virtus Appoints John Weisenseel to Board of Directors
Positive
Dec 11, 2024

Virtus Investment Partners has appointed John C. Weisenseel to its Board of Directors and Audit Committee, bringing over 20 years of senior financial leadership experience, including his role as CFO at AllianceBernstein. His extensive expertise in financial management and the asset management industry is expected to support Virtus in its growth and in delivering long-term shareholder value.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.