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

·3 min read

In the latest trading session, Visa (V) closed at $193.13, marking a -0.09% move from the previous day. This change lagged the S&P 500's daily gain of 0.69%. At the same time, the Dow added 0.64%, and the tech-heavy Nasdaq lost 0.2%.

Coming into today, shares of the global payments processor had lost 9.17% in the past month. In that same time, the Business Services sector lost 12.24%, while the S&P 500 lost 9.94%.

Visa will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.87, up 15.43% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $7.58 billion, up 15.63% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.41 per share and revenue of $29.08 billion. These totals would mark changes of +25.38% and +20.63%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Visa. 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.

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 0.09% higher. Visa is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Visa is currently trading at a Forward P/E ratio of 26.09. For comparison, its industry has an average Forward P/E of 16.46, which means Visa is trading at a premium to the group.

Also, we should mention that V has a PEG ratio of 1.56. 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. The Financial Transaction Services was holding an average PEG ratio of 1.03 at yesterday's closing price.

The Financial Transaction Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 188, which puts it in the bottom 26% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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