Here's Why Revenue Growth is Expected to Slow at Visa

July 23, 2014 3:47 PM

Visa Inc. (V) is set to report FQ3 2014 earnings after the market closes on Thursday, July 24th. Visa is an American multinational financial services company known for its branded credit and debit cards. Last quarter Visa lost its status as the world’s most popular debit card to China UnionPay, nevertheless Visa continues to grow in both EPS and revenue as the world increasingly shops with plastic. Over the previous 6 quarters Visa has matched or beaten the Wall Street earnings consensus each time and this quarter contributing analysts on Estimize.com expect the credit company to do it again by a wide margin.

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This quarter 38 contributing analysts on Estimize.com have come to a consensus earnings expectation of $2.18 EPS and $3.183B in revenue compared to a consensus of $2.09 EPS and $3.161B from Wall Street. Over the previous 6 quarters the Estimize community has been more accurate than Wall Street in forecasting Visa’s earnings and revenue 5 and 4 times respectively.

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Last quarter Visa crushed the earnings consensus from both Wall Street and the Estimize community. This quarter analysts on Estimize expect Visa’s EPS to come back down to Earth, but still increase by 18% compared to the same quarter of last year. 18% growth is slightly more tame than recent quarters as Visa increased earnings 20%, 21%, and 31% sequentially over the past 3 quarters. Year over year revenue growth is also anticipated to slump to just 6%.

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Estimize.com ranks and allows the sorting of analysts by accuracy, the analyst with the lowest error rate on Visa is a anonymous information technology professional who goes by the username cixoTrades. Over 3 previously scored estimates on Visa cixoTrades has averaged an error rate of 1.1%. Estimize is completely open and free for anyone to contribute, and the base of contributing analysts on the platform includes hedge fund analysts, asset managers, independent research shops, non professional investors, and students.

The Estimize consensus was more accurate than the Wall Street consensus 65% of the time last quarter on the coverage of nearly 1000 stocks. A combination of algorithms ensures that the data is not only clean and free from people attempting to game the system, but also weighs past performance and many other factors to gauge future accuracy.

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Contributing analysts on the Estimize.com platform are forecasting that on Thursday Visa will report earnings 9c (4%) per share ahead of Wall Street’s earnings forecast and beat the Street’s revenue consensus by $22 million (~1%). This quarter the Estimize community is expecting Visa to continue growing its earnings at a brisk pace of 17% yoy and for revenue growth to slow to a two year low of a modest 6%.

Head over to Estimize.com/calendar to follow the most comprehensive earnings season calendar on the web featuring consensus estimates from Wall Street and the Estimize community.

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