Visa (V) Dips More Than Broader Markets: What You Should Know
Visa (V) closed at $180.59 in the latest trading session, marking a -1.83% move from the prior day. This change lagged the S&P 500's daily loss of 1.03%. Elsewhere, the Dow lost 1.11%, while the tech-heavy Nasdaq lost 0.12%.
Prior to today's trading, shares of the global payments processor had lost 9.33% over the past month. This has was narrower than the Business Services sector's loss of 12.88% and the S&P 500's loss of 10.4% in that time.
Visa will be looking to display strength as it nears its next earnings release. On that day, Visa is projected to report earnings of $1.87 per share, which would represent year-over-year growth of 15.43%. Our most recent consensus estimate is calling for quarterly revenue of $7.58 billion, up 15.63% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.43 per share and revenue of $29.08 billion. These totals would mark changes of +25.72% and +20.63%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Visa. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.32% higher. Visa currently has a Zacks Rank of #3 (Hold).
Investors should also note Visa's current valuation metrics, including its Forward P/E ratio of 24.77. For comparison, its industry has an average Forward P/E of 15.08, which means Visa is trading at a premium to the group.
We can also see that V currently has a PEG ratio of 1.49. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Financial Transaction Services stocks are, on average, holding a PEG ratio of 0.97 based on yesterday's closing prices.
The Financial Transaction Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 177, putting it in the bottom 30% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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