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Will Visa (V) Continue With Its Beat Streak in Q4 Earnings?

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·3 min read
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Visa Inc. V is set to report fourth-quarter and fiscal 2021 results on Oct 26, after the market closes. Both revenues and earnings are expected to be higher for the September quarter.

Earnings & Revenue Expectations

The Zacks Consensus Estimate for Visa’s fourth-quarter fiscal 2021 earnings of $1.53 per share implies an increase of 36.61% from the prior fiscal-year period’s reported number. Likewise, the consensus estimate for sales of $6.48 billion suggests a 27.07% rise from the year-ago quarter’s reported figure.

Factors Likely to Impact Q4 Results

Consumers as well as merchants adapted to digital payments bigtime in the face of the pandemic, given the ease, convenience and security the same offers. These trends bode well for this payment processor.

The company draws revenues as a set percentage of the total transaction value everytime a customer’s debit/credit card is used for making payments. Thus, higher spending on its cards means more revenues in the form of transaction processing fees.

After witnessing low spending last year due to COVID-19, Visa’s operational metrics, such as payment volumes (the primary lever of service revenues), processed transactions (the primary driver of data processing revenues) and cross-border volumes are likely to have bettered in the to-be-reported quarter.

Visa performed well in the first nine months of fiscal 2021 with growth registered in payments volume as well as in the number of processed transactions, reflecting better operating efficiency.

Operating expenses are likely to have escalated amid stepped up investments for marketing and key initiatives to capture growth opportunities.

Earnings Surprise History

The company boasts an attractive earnings surprise record with its bottom line having surpassed estimates in each of the last four quarters, the average being 9.03%. This is depicted in the chart below:

Visa Inc. Price and EPS Surprise

Visa Inc. Price and EPS Surprise
Visa Inc. Price and EPS Surprise

Visa Inc. price-eps-surprise | Visa Inc. Quote

Earnings Whispers

Our proven model predicts a beat for Visa this earnings season. The combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — increases the odds of a positive surprise, which is the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter

Earnings ESP: Visa has an Earnings ESP of +0.24%.

Zacks Rank: Visa currently carries a Zacks Rank #2 (Buy).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks That Warrant a Look

Some other stocks worth considering with the apt combination of elements to surpass estimates this reporting cycle are as follows:

PagSeguro Digital Ltd. PAGS has an Earnings ESP of +74.64% and is presently Zacks #2 Ranked.

Square, Inc. SQ has an Earnings ESP of +1.05% and a Zacks Rank of 3, presently.

American Express Co. AXP has an Earnings ESP of +3.22% and a Zacks Rank of 3 at present.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Visa Inc. (V) : Free Stock Analysis Report

American Express Company (AXP) : Free Stock Analysis Report

Square, Inc. (SQ) : Free Stock Analysis Report

PagSeguro Digital Ltd. (PAGS) : Free Stock Analysis Report

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