Visa (V) Outpaces Stock Market Gains: What You Should Know
In the latest trading session, Visa (V) closed at $200.54, marking a +0.68% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.16%. Elsewhere, the Dow lost 0.42%, while the tech-heavy Nasdaq added 0.49%.
Prior to today's trading, shares of the global payments processor had lost 6.46% over the past month. This has was narrower than the Business Services sector's loss of 8.09% and the S&P 500's loss of 6.79% in that time.
Wall Street will be looking for positivity from Visa as it approaches its next earnings report date. On that day, Visa is projected to report earnings of $1.74 per share, which would represent year-over-year growth of 16.78%. Our most recent consensus estimate is calling for quarterly revenue of $7.04 billion, up 14.79% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.16 per share and revenue of $28.62 billion. These totals would mark changes of +21.15% and +18.73%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for Visa. Recent revisions tend to reflect the latest near-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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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 has moved 0.1% higher. Visa currently has a Zacks Rank of #3 (Hold).
Investors should also note Visa's current valuation metrics, including its Forward P/E ratio of 27.8. Its industry sports an average Forward P/E of 14.02, so we one might conclude that Visa is trading at a premium comparatively.
It is also worth noting that V currently has a PEG ratio of 1.69. 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 industry currently had an average PEG ratio of 1.01 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 153, which puts it in the bottom 40% 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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