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

Zacks Equity Research
KBR (KBR) possesses the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Visa (V) closed the most recent trading day at $165.31, moving +1.84% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.82%. Elsewhere, the Dow gained 0.82%, while the tech-heavy Nasdaq added 0.64%.

Coming into today, shares of the global payments processor had gained 1.32% in the past month. In that same time, the Business Services sector lost 0.25%, while the S&P 500 lost 4.58%.

V will be looking to display strength as it nears its next earnings release. On that day, V is projected to report earnings of $1.33 per share, which would represent year-over-year growth of 10.83%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.70 billion, up 8.78% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.38 per share and revenue of $22.75 billion, which would represent changes of +16.7% and +10.4%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for V. Recent revisions tend to reflect the latest 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. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.05% higher 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 30.19. This valuation marks a premium compared to its industry's average Forward P/E of 21.91.

Investors should also note that V has a PEG ratio of 1.83 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Financial Transaction Services was holding an average PEG ratio of 1.85 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 42, putting it in the top 17% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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