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

Zacks Equity Research
Skyworks Solutions (SWKS) closed the most recent trading day at $81.32, moving -0.12% from the previous trading session.

Visa (V) closed at $162.98 in the latest trading session, marking a +0.15% move from the prior day. This move lagged the S&P 500's daily gain of 0.21%. Elsewhere, the Dow gained 0.17%, while the tech-heavy Nasdaq added 0.27%.

Heading into today, shares of the global payments processor had lost 0.04% over the past month, outpacing the Business Services sector's loss of 0.74% and the S&P 500's loss of 5.26% in that time.

V will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.33, up 10.83% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.70 billion, up 8.78% from the prior-year quarter.

V's full-year Zacks Consensus Estimates are calling for earnings of $5.37 per share and revenue of $22.75 billion. These results would represent year-over-year changes of +16.49% and +10.4%, respectively.

Any recent changes to analyst estimates for V should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Within the past 30 days, our consensus EPS projection has moved 0.01% lower. V currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that V has a Forward P/E ratio of 30.28 right now. This represents a premium compared to its industry's average Forward P/E of 22.02.

Also, we should mention that V has a PEG ratio of 1.84. 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. The Financial Transaction Services industry currently had an average PEG ratio of 1.84 as of yesterday's close.

The Financial Transaction Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 49, which puts it in the top 20% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

To follow V in the coming trading sessions, be sure to utilize Zacks.com.


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