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Visa (V) Gains As Market Dips: What You Should Know

Zacks Equity Research

Visa (V) closed the most recent trading day at $181.76, moving +0.97% from the previous trading session. This move outpaced the S&P 500's daily loss of 3.17%. At the same time, the Dow lost 3.77%, and the tech-heavy Nasdaq lost 2.28%.

Prior to today's trading, shares of the global payments processor had lost 13.54% over the past month. This has lagged the Business Services sector's loss of 8.45% and the S&P 500's loss of 8.05% in that time.

Wall Street will be looking for positivity from V as it approaches its next earnings report date. The company is expected to report EPS of $1.41, up 7.63% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.05 billion, up 10.07% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.14 per share and revenue of $25.34 billion, which would represent changes of +12.87% and +10.29%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for V. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.72% lower. V is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that V has a Forward P/E ratio of 29.31 right now. This represents a premium compared to its industry's average Forward P/E of 21.08.

It is also worth noting that V currently has a PEG ratio of 1.9. 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. Financial Transaction Services stocks are, on average, holding a PEG ratio of 1.54 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 114, putting it in the top 45% 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.

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


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