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Visa (V) Gains But Lags Market: What You Should Know

Zacks Equity Research

Visa (V) closed at $196.87 in the latest trading session, marking a +0.26% move from the prior day. The stock lagged the S&P 500's daily gain of 1.37%. Meanwhile, the Dow gained 2.05%, and the Nasdaq, a tech-heavy index, added 0.78%.

Investors will be hoping for strength from V as it approaches its next earnings release. In that report, analysts expect V to post earnings of $1 per share. This would mark a year-over-year decline of 27.01%. Our most recent consensus estimate is calling for quarterly revenue of $4.75 billion, down 18.67% from the year-ago period.

V's full-year Zacks Consensus Estimates are calling for earnings of $4.99 per share and revenue of $21.80 billion. These results would represent year-over-year changes of -8.27% and -5.11%, respectively.

Investors might also notice recent changes to analyst estimates for V. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.35% lower within the past month. V is currently a Zacks Rank #3 (Hold).

Looking at its valuation, V is holding a Forward P/E ratio of 39.36. For comparison, its industry has an average Forward P/E of 28.42, which means V is trading at a premium to the group.

We can also see that V currently has a PEG ratio of 3.12. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Financial Transaction Services stocks are, on average, holding a PEG ratio of 1.96 based on yesterday's closing prices.

The Financial Transaction Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 127, which puts it in the top 50% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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