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Virtusa

Nasdaq:VRTU
Snowflake Description

Good value with moderate growth potential.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
VRTU
Nasdaq
$850M
Market Cap
  1. Home
  2. US
  3. Software
Company description

Virtusa Corporation provides digital engineering and information technology (IT) outsourcing services primarily in North America, Europe, and Asia. The last earnings update was 61 days ago. More info.


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  • Virtusa has significant price volatility in the past 3 months.
VRTU Share Price and Events
7 Day Returns
6.4%
NasdaqGS:VRTU
4.3%
US IT
2.4%
US Market
1 Year Returns
-49.6%
NasdaqGS:VRTU
-1.2%
US IT
-10%
US Market
VRTU Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Virtusa (VRTU) 6.4% -29.9% -31% -49.6% 3.8% -29.6%
US IT 4.3% -10% -15.6% -1.2% 59.3% 77.7%
US Market 2.4% -11% -19.4% -10% 9.6% 21.1%
1 Year Return vs Industry and Market
  • VRTU underperformed the IT industry which returned -1.2% over the past year.
  • VRTU underperformed the Market in United States of America which returned -10% over the past year.
Price Volatility
VRTU
Industry
5yr Volatility vs Market

Value

 Is Virtusa undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Virtusa to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Virtusa.

NasdaqGS:VRTU Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 7 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 8.3%
Perpetual Growth Rate 10-Year US Government Bond Rate 1.7%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NasdaqGS:VRTU
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 1.7%
Equity Risk Premium S&P Global 5.4%
IT Unlevered Beta Simply Wall St/ S&P Global 0.91
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.913 (1 + (1- 21%) (53.07%))
1.198
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.2
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 1.74% + (1.198 * 5.44%)
8.26%

Discounted Cash Flow Calculation for NasdaqGS:VRTU using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Virtusa is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

Note: Free cash flow to equity valuations ignore the company's cash or debt.

NasdaqGS:VRTU DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (USD, Millions) Source Present Value
Discounted (@ 8.26%)
2020 73.00 Analyst x1 67.43
2021 77.00 Analyst x1 65.70
2022 90.00 Analyst x1 70.93
2023 99.50 Est @ 10.55% 72.44
2024 107.37 Est @ 7.91% 72.21
2025 113.87 Est @ 6.06% 70.74
2026 119.30 Est @ 4.76% 68.46
2027 123.90 Est @ 3.86% 65.67
2028 127.89 Est @ 3.22% 62.62
2029 131.44 Est @ 2.78% 59.45
Present value of next 10 years cash flows $675.00
NasdaqGS:VRTU DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2029 × (1 + g) ÷ (Discount Rate – g)
= $131.44 × (1 + 1.74%) ÷ (8.26% – 1.74%)
$2,051.60
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= $2,051.60 ÷ (1 + 8.26%)10
$927.86
NasdaqGS:VRTU Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= $675.00 + $927.86
$1,602.86
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $1,602.86 / 29.86
$53.68
NasdaqGS:VRTU Discount to Share Price
Calculation Result
Value per share (USD) From above. $53.68
Current discount Discount to share price of $28.46
= -1 x ($28.46 - $53.68) / $53.68
47%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount
Amount off the current price Virtusa is available for.
Intrinsic value
47%
Share price is $28.46 vs Future cash flow value of $53.68
Current Discount Checks
For Virtusa to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • Virtusa's share price is below the future cash flow value, and at a moderate discount (> 20%).
  • Virtusa's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Virtusa's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Virtusa's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NasdaqGS:VRTU PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-12-31) in USD $0.99
NasdaqGS:VRTU Share Price ** NasdaqGS (2020-04-07) in USD $28.46
United States of America IT Industry PE Ratio Median Figure of 71 Publicly-Listed IT Companies 24.84x
United States of America Market PE Ratio Median Figure of 2,948 Publicly-Listed Companies 12.95x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Virtusa.

NasdaqGS:VRTU PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NasdaqGS:VRTU Share Price ÷ EPS (both in USD)

= 28.46 ÷ 0.99

28.8x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Virtusa is overvalued based on earnings compared to the US IT industry average.
  • Virtusa is overvalued based on earnings compared to the United States of America market.
Price based on expected Growth
Does Virtusa's expected growth come at a high price?
Raw Data
NasdaqGS:VRTU PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 28.8x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 7 Analysts
34%per year
United States of America IT Industry PEG Ratio Median Figure of 60 Publicly-Listed IT Companies 1.89x
United States of America Market PEG Ratio Median Figure of 2,010 Publicly-Listed Companies 0.92x

*Line of best fit is calculated by linear regression .

NasdaqGS:VRTU PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 28.8x ÷ 34%

0.85x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Virtusa is good value based on expected growth next year.
Price based on value of assets
What value do investors place on Virtusa's assets?
Raw Data
NasdaqGS:VRTU PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-12-31) in USD $13.51
NasdaqGS:VRTU Share Price * NasdaqGS (2020-04-07) in USD $28.46
United States of America IT Industry PB Ratio Median Figure of 116 Publicly-Listed IT Companies 2.88x
United States of America Market PB Ratio Median Figure of 5,162 Publicly-Listed Companies 1.26x
NasdaqGS:VRTU PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NasdaqGS:VRTU Share Price ÷ Book Value per Share (both in USD)

= 28.46 ÷ 13.51

2.11x

* Primary Listing of Virtusa.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Virtusa is good value based on assets compared to the US IT industry average.
X
Value checks
We assess Virtusa's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the IT industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the IT industry average (and greater than 0)? (1 check)
  5. Virtusa has a total score of 4/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

 How is Virtusa expected to perform in the next 1 to 3 years based on estimates from 7 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
34%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Virtusa expected to grow at an attractive rate?
  • Virtusa's earnings growth is expected to exceed the low risk savings rate of 1.7%.
Growth vs Market Checks
  • Virtusa's earnings growth is expected to exceed the United States of America market average.
  • Virtusa's revenue growth is positive but not above the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NasdaqGS:VRTU Future Growth Rates Data Sources
Data Point Source Value (per year)
NasdaqGS:VRTU Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 7 Analysts 34%
NasdaqGS:VRTU Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 7 Analysts 5.9%
United States of America IT Industry Earnings Growth Rate Market Cap Weighted Average 16.4%
United States of America IT Industry Revenue Growth Rate Market Cap Weighted Average 9.7%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 13.3%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NasdaqGS:VRTU Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 7 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NasdaqGS:VRTU Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2022-03-31 1,497 125 76 5
2021-03-31 1,387 109 53 7
2020-04-08
2020-03-31 1,328 94 42 7
NasdaqGS:VRTU Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2019-12-31 1,310 73 30
2019-09-30 1,290 59 30
2019-06-30 1,267 78 24
2019-03-31 1,248 69 12
2018-12-31 1,202 78 6
2018-09-30 1,151 66 -16
2018-06-30 1,093 55 -13
2018-03-31 1,021 63 -3
2017-12-31 965 57 6
2017-09-30 919 46 22
2017-06-30 881 43 21
2017-03-31 859 28 12

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Virtusa's earnings are expected to grow significantly at over 20% yearly.
  • Virtusa's revenue is expected to grow by 5.9% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NasdaqGS:VRTU Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 7 Analyst Estimates (S&P Global) See Below

All data from Virtusa Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:VRTU Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2022-03-31 2.31 3.08 1.96 4.00
2021-03-31 1.66 2.39 0.73 6.00
2020-04-08
2020-03-31 1.34 1.49 0.95 6.00
NasdaqGS:VRTU Past Financials Data
Date (Data in USD Millions) EPS *
2019-12-31 0.99
2019-09-30 0.98
2019-06-30 0.80
2019-03-31 0.40
2018-12-31 0.21
2018-09-30 -0.55
2018-06-30 -0.44
2018-03-31 -0.09
2017-12-31 0.20
2017-09-30 0.73
2017-06-30 0.71
2017-03-31 0.40

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Virtusa is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
X
Future performance checks
We assess Virtusa's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Virtusa has a total score of 3/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Virtusa performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Virtusa's growth in the last year to its industry (IT).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Virtusa's year on year earnings growth rate was negative over the past 5 years, however the most recent earnings are above average.
  • Virtusa's 1-year earnings growth exceeds its 5-year average (369.6% vs -29.3%)
  • Virtusa's earnings growth has exceeded the US IT industry average in the past year (369.6% vs 13.7%).
Earnings and Revenue History
Virtusa's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Virtusa Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:VRTU Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-12-31 1,310.26 29.67 284.15
2019-09-30 1,289.84 29.52 289.66
2019-06-30 1,266.86 23.93 294.24
2019-03-31 1,247.86 11.80 293.03
2018-12-31 1,201.57 6.32 286.25
2018-09-30 1,150.70 -16.31 279.05
2018-06-30 1,093.36 -13.05 263.47
2018-03-31 1,020.67 -2.71 248.91
2017-12-31 965.29 5.96 239.53
2017-09-30 918.69 21.54 227.93
2017-06-30 880.61 21.07 221.73
2017-03-31 858.73 11.86 219.53
2016-12-31 804.62 13.68 206.03
2016-09-30 738.02 20.56 190.51
2016-06-30 670.93 28.43 173.46
2016-03-31 600.30 44.80 165.67
2015-12-31 554.47 44.06 142.62
2015-09-30 526.86 44.53 134.30
2015-06-30 501.56 43.56 130.35
2015-03-31 478.99 42.45 122.00
2014-12-31 464.07 40.94 122.19
2014-09-30 442.12 38.49 117.02
2014-06-30 418.72 35.86 108.75
2014-03-31 396.93 34.38 103.99
2013-12-31 375.78 33.42 96.66
2013-09-30 361.21 31.50 92.27
2013-06-30 347.45 29.78 88.45

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Virtusa has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Virtusa used its assets less efficiently than the US IT industry average last year based on Return on Assets.
  • Virtusa has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Virtusa's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the IT industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Virtusa has a total score of 3/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Virtusa's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Virtusa's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Virtusa is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Virtusa's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Virtusa's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Debt is covered by short term assets, assets are 1.5x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Virtusa Company Filings, last reported 3 months ago.

NasdaqGS:VRTU Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2019-12-31 510.58 395.60 237.45
2019-09-30 504.64 391.39 198.28
2019-06-30 525.06 368.32 207.92
2019-03-31 521.51 366.36 222.81
2018-12-31 512.86 325.41 252.22
2018-09-30 491.12 325.93 231.09
2018-06-30 528.38 299.03 211.19
2018-03-31 543.08 299.63 240.80
2017-12-31 685.78 130.44 293.26
2017-09-30 680.31 105.16 238.92
2017-06-30 673.55 104.87 216.41
2017-03-31 585.02 185.59 216.94
2016-12-31 558.01 187.81 214.61
2016-09-30 545.09 190.13 201.43
2016-06-30 532.65 192.24 188.46
2016-03-31 627.96 194.51 202.90
2015-12-31 453.24 0.00 179.12
2015-09-30 439.66 0.00 178.54
2015-06-30 431.02 0.00 180.60
2015-03-31 423.78 0.00 215.22
2014-12-31 407.24 0.00 184.20
2014-09-30 395.98 0.00 161.55
2014-06-30 385.28 0.00 138.84
2014-03-31 374.07 0.00 138.65
2013-12-31 267.77 20.00 134.17
2013-09-30 251.27 0.00 102.20
2013-06-30 249.06 0.00 81.54
  • Virtusa's level of debt (77.5%) compared to net worth is high (greater than 40%).
  • Unable to establish if Virtusa's debt level has increased without past 5-year debt data.
  • Debt is not well covered by operating cash flow (18.5%, less than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 5.1x coverage).
X
Financial health checks
We assess Virtusa's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Virtusa has a total score of 3/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is Virtusa's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
0%
Current annual income from Virtusa dividends.
If you bought $2,000 of Virtusa shares you are expected to receive $0 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Unable to evaluate Virtusa's dividend yield against the bottom 25% of dividend payers as the company has not reported any payouts.
  • Unable to evaluate Virtusa's dividend against the top 25% market benchmark as the company has not reported any payouts.
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NasdaqGS:VRTU Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 7 Analyst Estimates (S&P Global) See Below
United States of America IT Industry Average Dividend Yield Market Cap Weighted Average of 34 Stocks 1.5%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 1935 Stocks 2.9%
United States of America Minimum Threshold Dividend Yield 10th Percentile 1.1%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.9%
United States of America Top 25% Dividend Yield 75th Percentile 5.5%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NasdaqGS:VRTU Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2022-03-31
2021-03-31
2020-04-08
2020-03-31

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Unable to perform a dividend volatility check as Virtusa has not reported any payouts.
  • Unable to verify if Virtusa's dividend has been increasing as the company has not reported any payouts.
Current Payout to shareholders
What portion of Virtusa's earnings are paid to the shareholders as a dividend.
  • Unable to calculate sustainability of dividends as Virtusa has not reported any payouts.
Future Payout to shareholders
  • Insufficient estimate data to determine if a dividend will be paid in 3 years and that it will be sustainable.
X
Income/ dividend checks
We assess Virtusa's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 1.1%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Virtusa afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Virtusa has a total score of 0/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of Virtusa's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Kris Canekeratne
COMPENSATION $7,979,479
AGE 53
TENURE AS CEO 20.3 years
CEO Bio

Mr. Krishan Aruna Canekeratne, also known as Kris, is a Co-Founder of Virtusa Corporation and has been its Chief Executive Officer since 2000. Mr. Canekeratne has served as Chairman of Board of Directors at Virtusa Corporation since inception. He previously served as the Chief Executive Officer of Virtusa Corporation from 1996 to 1997. In 1997, Mr. Canekeratne co-founded eDocs, Inc. In 1989, Mr. Canekeratne was one of the founding team members of INSCI Corporation and served as its Senior Vice President from 1992 to 1996. Mr. Canekeratne obtained his B.S. in Computer Science from Syracuse University.

CEO Compensation
  • Kris's compensation has been consistent with company performance over the past year, both up more than 20%.
  • Kris's remuneration is higher than average for companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the Virtusa management team in years:

11.5
Average Tenure
55
Average Age
  • The average tenure for the Virtusa management team is over 5 years, this suggests they are a seasoned and experienced team.
Management Team

Kris Canekeratne

TITLE
Co-Founder
COMPENSATION
$8M
AGE
53
TENURE
20.3 yrs

Samir Dhir

TITLE
President & Head of Americas
COMPENSATION
$3M
AGE
48
TENURE
2.7 yrs

Ranjan Kalia

TITLE
Executive VP of Finance
COMPENSATION
$3M
AGE
57
TENURE
11.5 yrs

Roger Modder

TITLE
Executive VP
COMPENSATION
$2M
AGE
55
TENURE
8.9 yrs

Tom Holler

TITLE
Executive VP & Chief Strategy Officer
COMPENSATION
$2M
AGE
56
TENURE
19.3 yrs

John Gillis

TITLE
Co-Founder & Executive VP
TENURE
24.3 yrs

Kirsten Paragona

TITLE
Global Head of Media Relations

Sundar Narayanan

TITLE
Executive VP & Chief People Officer

Jim Francis

TITLE
Senior Officer

Stuart Chandler

TITLE
Head of Global BPM & Senior VP
TENURE
4.4 yrs
Board of Directors Tenure

Average tenure and age of the Virtusa board of directors in years:

6.6
Average Tenure
64
Average Age
  • The tenure for the Virtusa board of directors is about average.
Board of Directors

Row Moriarty

TITLE
Lead Independent Director
COMPENSATION
$240K
AGE
72

Kris Canekeratne

TITLE
Co-Founder
COMPENSATION
$8M
AGE
53
TENURE
24.3 yrs

Bill O'Brien

TITLE
Independent Director
COMPENSATION
$215K
AGE
74
TENURE
11.4 yrs

Barry Nearhos

TITLE
Independent Director
COMPENSATION
$222K
AGE
61
TENURE
4.1 yrs

Vikram Pandit

TITLE
Independent Director
COMPENSATION
$210K
AGE
62
TENURE
2.9 yrs

Izhar Armony

TITLE
Independent Director
COMPENSATION
$200K
AGE
54
TENURE
16 yrs

Al-Noor Gulamali Abdulla Ramji

TITLE
Independent Director
COMPENSATION
$200K
AGE
65
TENURE
9.2 yrs

Joe Doody

TITLE
Independent Director
COMPENSATION
$200K
AGE
67
TENURE
3.2 yrs

Debby Hopkins

TITLE
Independent Director
COMPENSATION
$225K
AGE
64
TENURE
1.6 yrs
Who owns this company?
Recent Insider Trading
  • Virtusa individual insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
14. Feb 20 Sell Roger Modder Individual 12. Feb 20 14. Feb 20 -20,000 $49.25 $-980,488
29. Nov 19 Sell Sundararajan Narayanan Individual 26. Nov 19 27. Nov 19 -2,500 $45.50 $-113,653
26. Nov 19 Sell Anuranjan Kalia Individual 25. Nov 19 25. Nov 19 -5,000 $45.00 $-225,000
22. Nov 19 Sell Anuranjan Kalia Individual 21. Nov 19 21. Nov 19 -5,000 $44.00 $-220,000
13. Nov 19 Sell Thomas Holler Individual 12. Nov 19 12. Nov 19 -10,525 $42.99 $-452,459
03. Jun 19 Buy Joseph Doody Individual 31. May 19 31. May 19 5,000 $42.50 $212,500
X
Management checks
We assess Virtusa's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Virtusa has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

Is Virtusa Corporation's (NASDAQ:VRTU) CEO Pay Fair?

Thus we can conclude that Kris Canekeratne receives more in total compensation than the median of a group of companies in the same market, and of similar size to Virtusa Corporation. … Over the last three years Virtusa Corporation has shrunk its earnings per share by an average of 41% per year (measured with a line of best fit). … I think that the total shareholder return of 39%, over three years, would leave most Virtusa Corporation shareholders smiling.

Simply Wall St -

Virtusa (NASDAQ:VRTU) Shareholders Booked A 55% Gain In The Last Three Years

It might be of some concern to shareholders to see the Virtusa Corporation (NASDAQ:VRTU) share price down 25% in the last month. … But over three years, the returns would have left most investors smiling In fact, the company's share price bested the return of its market index in that time, posting a gain of 55%. … A Different Perspective Virtusa shareholders are down 36% for the year, but the market itself is up 3.5%.

Simply Wall St -

Virtusa Corporation’s (NASDAQ:VRTU) Investment Returns Are Lagging Its Industry

The formula for calculating the return on capital employed is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) Or for Virtusa: 0.076 = US$70m ÷ (US$1.1b - US$214m) (Based on the trailing twelve months to March 2019.) So, Virtusa has an ROCE of 7.6%. … How Virtusa's Current Liabilities Impact Its ROCE Liabilities, such as supplier bills and bank overdrafts, are referred to as current liabilities if they need to be paid within 12 months. … Due to the way the ROCE equation works, having large bills due in the near term can make it look as though a company has less capital employed, and thus a higher ROCE than usual.

Simply Wall St -

Does Virtusa Corporation (NASDAQ:VRTU) Have A Particularly Volatile Share Price?

Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. … Some investors use beta as a measure of how much a certain stock is impacted by market risk (volatility). … This is above 1, so historically its share price has been influenced by the broader volatility of the stock market.

Simply Wall St -

Virtusa (NASDAQ:VRTU) Seems To Use Debt Quite Sensibly

Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. … Because it carries more debt than cash, we think it's worth watching Virtusa's balance sheet over time. … This free cash flow puts the company in a good position to pay down debt, when appropriate.

Simply Wall St -

Should You Think About Buying Virtusa Corporation (NASDAQ:VRTU) Now?

Virtusa Corporation (NASDAQ:VRTU), which is in the it business, and is based in United States, saw significant share price movement during recent months on the NASDAQGS, rising to highs of $56.45 and falling to the lows of $41.27. … It’s trading around 11% below my intrinsic value, which means if you buy Virtusa today, you’d be paying a fair price for it. … Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price.

Simply Wall St -

Should You Be Worried About Insider Transactions At Virtusa Corporation (NASDAQ:VRTU)?

So before you buy or sell Virtusa Corporation (NASDAQ:VRTU), you may well want to know whether insiders have been buying or selling. … But logic dictates you should pay some attention to whether insiders are buying or selling shares. … As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation

Simply Wall St -

Is Virtusa Corporation (NASDAQ:VRTU) Struggling With Its 7.6% Return On Capital Employed?

Specifically, we'll consider its Return On Capital Employed (ROCE), since that will give us an insight into how efficiently the business can generate profits from the capital it requires. … Return On Capital Employed (ROCE): What is it? … Analysts use this formula to calculate return on capital employed:

Simply Wall St -

You Might Like Virtusa Corporation (NASDAQ:VRTU) But Do You Like Its Debt?

Evaluating financial health as part of your investment thesis is. … since poor capital management may bring about bankruptcies, … Let's work through some financial health checks you may wish to consider if you're interested in this stock.

Simply Wall St -

Is Virtusa Corporation's (NASDAQ:VRTU) 2.7% ROE Worse Than Average?

This article is for those who would like to learn about Return On Equity (ROE). … That means that for every $1 worth of shareholders' equity, it generated $0.027 in profit. … Return on Equity = Net Profit ÷ Shareholders' Equity

Simply Wall St -

Company Info

Description

Virtusa Corporation provides digital engineering and information technology (IT) outsourcing services primarily in North America, Europe, and Asia. The company offers business and IT consulting services, including advisory/target operating model, business process re-engineering/business management, transformational solution consulting, and business/technology alignment analysis; omni-channel digital strategy, experience design accelerated solution design, and employee engagement; and application portfolio rationalization, SDLC transformation, and BA competency transformation services. It also provides application development, software product engineering, CRM and SAP implementation, content management, enterprise mobility, cloud computing, and social media solutions; systems consolidation and rationalization, technology migration and porting, and legacy application Web-enablement; data management, business intelligence, reporting and decision support, master data management, data integration, and big data analytics; and software quality assurance and managed testing services. In addition, the company offers application maintenance and support, applications enhancement, and cloud-environment management and support; managed infrastructure, and remote application monitoring and support services; and IT efficiency improvement services. Further, it offers digital engineering and operational excellence services-based, and transformational solutions. Virtusa Corporation serves communications and technology; banking, financial services, and insurance; and media and information industries. The company was formerly known as eRunway, Inc. and changed its name to Virtusa Corporation in April 2002. Virtusa Corporation was founded in 1996 and is headquartered in Southborough, Massachusetts.

Details
Name: Virtusa Corporation
VRTU
Exchange: NasdaqGS
Founded: 1996
$849,829,858
29,860,501
Website: http://www.virtusa.com
Address: Virtusa Corporation
132 Turnpike Road,
Suite 300,
Southborough,
Massachusetts, 01772,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NasdaqGS VRTU Common Stock Nasdaq Global Select US USD 03. Aug 2007
DB EG1 Common Stock Deutsche Boerse AG DE EUR 03. Aug 2007
Number of employees
Current staff
Staff numbers
22,267
Virtusa employees.
Industry
IT Consulting and Other Services
Software
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2020/04/08 06:00
End of day share price update: 2020/04/07 00:00
Last estimates confirmation: 2020/03/31
Last earnings filing: 2020/02/07
Last earnings reported: 2019/12/31
Last annual earnings reported: 2019/03/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.