Here's Why Prudent Investors are Buying Visa (V) Stock Now
Visa Inc. V is well poised to grow on the back of higher payments, cross-border volumes and processed transactions. The steady cross-border travel and data processing growth will continue to aid its performance.
Headquartered in San Francisco, Visa is a global payments technology mammoth. It has a market cap of $426 billion. Over the year-to-date period, shares of the company have gained 11.3%, outperforming the industry’s 8.4% rise. Courtesy of solid prospects, this Zacks Rank #2 (Buy) stock is worth adding to your portfolio at the moment.
Let’s delve deeper.
The Zacks Consensus Estimate for V’s current-year earnings is pegged at $8.65 per share, which indicates 15.3% year-over-year growth. The estimate remained stable over the past week. Visa beat on earnings in all the last four quarters, the average surprise being 5.2%.
Visa Inc. Price and EPS Surprise
Visa Inc. price-eps-surprise | Visa Inc. Quote
The consensus mark for current-year revenues stands at $32.6 billion, indicating 11.2% growth from a year ago. Our estimates for service revenues and data processing revenues indicate an 11.5% and 10.2% increase from a year ago, respectively, which will likely support its top-line growth.
We expect fiscal 2023 processed transactions to rise more than 10% year over year. The company’s growing network is expected to boost volumes. We expect total payment volume to rise nearly 6% year over year. It strikes numerous partnerships to boost the usage of its network and technology.
Its investments in technology are further boosting its already leading position in the payments market. This helps the company to minimize the impact of fraud, and protect consumer and merchant information. This is of huge importance as digital payment methods are rapidly gaining popularity.
With the growing digitalization of economies, Visa’s technological prowess allows it to forge partnerships with countries and governments. These partnerships will position the company for long-term growth. Its ability to innovate and create financial products tailored to clients’ and customers’ needs is commendable.
However, there are a few factors that investors should keep an eye on. For example, the Credit Card Competition Act, a bipartisan bill, was reintroduced in both the House and the Senate in June with additional co-sponsors. The proposed measure will likely raise competition through the usage of alternative credit card processing networks. Also, the company’s rising expenses are concerning. Nevertheless, we believe that a systematic and strategic plan of action will drive its growth in the long term.
Visa’s strong financial position with a healthy balance sheet and free cash flow generating ability enables it to make acquisitions, invest for long-term growth opportunities and boost shareholders’ value. It rewarded $3.9 billion to shareholders via share buybacks and dividends in the June quarter. As of Jun 30, 2023, the company had authorized funds of $8.8 billion remaining under its share buyback program.
Other Top-Ranked Players
Some other top-ranked stocks in the broader Business Services space are Shift4 Payments, Inc. FOUR, FirstCash Holdings, Inc. FCFS and Paysafe Limited PSFE. While Shift4 Payments currently sports a Zacks Rank #1 (Strong Buy), FirstCash and Paysafe carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Shift4 Payments’ current-year bottom line suggests 100.7% year-over-year growth. Based in Allentown, PA, FOUR beat earnings estimates in all the past four quarters, with an average surprise of 21.9%.
The Zacks Consensus Estimate for FirstCash’s current-year earnings indicates a 6.7% year-over-year gain. Fort Worth, TX-based FCFS beat earnings estimates in all the past four quarters, with an average surprise of 7.3%.
The Zacks Consensus Estimate for Paysafe’s current-year bottom line implies a 5.8% year-over-year rise. Headquartered in London, PSFE beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 154%.
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Visa Inc. (V) : Free Stock Analysis Report
FirstCash Holdings, Inc. (FCFS) : Free Stock Analysis Report
Shift4 Payments, Inc. (FOUR) : Free Stock Analysis Report
Paysafe Limited (PSFE) : Free Stock Analysis Report
