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

Zacks Equity Research

In the latest trading session, Visa (V) closed at $191.38, marking a +1.11% move from the previous day. This change lagged the S&P 500's 1.47% gain on the day. Meanwhile, the Dow gained 2.32%, and the Nasdaq, a tech-heavy index, added 1.2%.

Prior to today's trading, shares of the global payments processor had lost 2.57% over the past month. This has lagged the Business Services sector's gain of 1.14% and the S&P 500's gain of 0.74% in that time.

Wall Street will be looking for positivity from V as it approaches its next earnings report date. On that day, V is projected to report earnings of $1.01 per share, which would represent a year-over-year decline of 26.28%. Our most recent consensus estimate is calling for quarterly revenue of $4.78 billion, down 18.14% from the year-ago period.

V's full-year Zacks Consensus Estimates are calling for earnings of $5 per share and revenue of $21.88 billion. These results would represent year-over-year changes of -8.09% and -4.76%, respectively.

Investors should also note any recent changes to analyst estimates for V. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.11% higher. V is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, V is currently trading at a Forward P/E ratio of 37.88. This valuation marks a premium compared to its industry's average Forward P/E of 27.1.

Meanwhile, V's PEG ratio is currently 3. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Financial Transaction Services was holding an average PEG ratio of 1.81 at yesterday's closing price.

The Financial Transaction Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 91, putting it in the top 36% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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