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Visa (V) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
People's United (PBCT) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

In the latest trading session, Visa (V) closed at $151.73, marking a +0.7% move from the previous day. This change outpaced the S&P 500's 0.3% gain on the day. Meanwhile, the Dow lost 0.38%, and the Nasdaq, a tech-heavy index, added 0.44%.

Prior to today's trading, shares of the global payments processor had gained 7.01% over the past month. This has outpaced the Business Services sector's gain of 4.72% and the S&P 500's gain of 2.91% in that time.

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 $1.24 per share. This would mark year-over-year growth of 11.71%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.45 billion, up 7.5% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.32 per share and revenue of $22.76 billion. These totals would mark changes of +15.4% and +10.41%, respectively, from last year.

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. 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. Within the past 30 days, our consensus EPS projection remained stagnant. V is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, V currently has a Forward P/E ratio of 28.33. This represents a premium compared to its industry's average Forward P/E of 19.52.

It is also worth noting that V currently has a PEG ratio of 1.72. 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. V's industry had an average PEG ratio of 1.48 as of yesterday's close.

The Financial Transaction Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 142, putting it in the bottom 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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