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

Zacks Equity Research
·3 min read

In the latest trading session, Visa (V) closed at $218.36, marking a +1.86% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.13%. At the same time, the Dow added 0.24%, and the tech-heavy Nasdaq gained 0.15%.

Heading into today, shares of the global payments processor had gained 1.5% over the past month, outpacing the Business Services sector's gain of 1.34% and lagging the S&P 500's gain of 2.59% in that time.

V will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.27, down 13.01% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.51 billion, down 8.95% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.44 per share and revenue of $23.25 billion, which would represent changes of +7.94% and +6.41%, respectively, from the prior year.

It is also important to note the 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Within the past 30 days, our consensus EPS projection has moved 0.69% lower. V is currently a Zacks Rank #3 (Hold).

Looking at its valuation, V is holding a Forward P/E ratio of 39.39. Its industry sports an average Forward P/E of 26.73, so we one might conclude that V is trading at a premium comparatively.

It is also worth noting that V currently has a PEG ratio of 3.89. 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 2.05 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 185, putting it in the bottom 28% 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.

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


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