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

Zacks Equity Research

In the latest trading session, Visa (V) closed at $207.90, marking a +0.29% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.03%. At the same time, the Dow lost 0.03%, and the tech-heavy Nasdaq gained 0.14%.

Prior to today's trading, shares of the global payments processor had gained 10.51% over the past month. This has outpaced the Business Services sector's gain of 3.56% and the S&P 500's gain of 3.23% in that time.

Investors will be hoping for strength from V as it approaches its next earnings release, which is expected to be January 30, 2020. The company is expected to report EPS of $1.46, up 12.31% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $6.06 billion, up 10.07% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.19 per share and revenue of $25.40 billion. These totals would mark changes of +13.79% and +10.55%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for V. These revisions help to show the ever-changing nature of near-term business trends. 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. 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 0.25% lower. V is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, V is currently trading at a Forward P/E ratio of 33.47. This represents a premium compared to its industry's average Forward P/E of 22.98.

Investors should also note that V has a PEG ratio of 2.15 right now. 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 1.76 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 56, putting it in the top 22% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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