V - Visa Inc.
160.42 -0.02 (-0.01%)
Pre-Market: 8:46AM EDT
| Previous Close | 160.23 |
| Open | 160.87 |
| Bid | 160.01 x 800 |
| Ask | 160.75 x 1300 |
| Day's Range | 160.31 - 161.07 |
| 52 Week Range | 119.37 - 161.10 |
| Volume | 4,476,748 |
| Avg. Volume | 8,443,174 |
| Market Cap | 352.496B |
| Beta (3Y Monthly) | 0.88 |
| PE Ratio (TTM) | 34.51 |
| EPS (TTM) | 4.65 |
| Earnings Date | Apr 24, 2019 |
| Forward Dividend & Yield | 1.00 (0.64%) |
| Ex-Dividend Date | 2019-02-14 |
| 1y Target Est | 168.00 |
- Yahoo Finance Video•3 days ago
Market Recap for Monday, April 15
Stocks dipped on Monday, weighed by big bank results that investors found wanting. Two big bank stocks reported mixed earnings Monday morning, Goldman Sachs and Citigroup, with their results weighed by a soft trading revenues. Meanwhile, 6 Dow components hit record highs.
- Investing.com•11 hours ago
Crypto Prices Edge Up; CoinMarketCap to Launch Crypto Benchmark Indices
Investing.com - Prices of the major cryptocurrencies edged up on Thursday in Asia. Reports that CoinMarketCap will launch two cryptoucurrency benchmark indices received some attention.
- Market Realist•18 hours ago
Why Qualcomm Is among Steve Cohen’s Top Bets
Could Apple and Qualcomm’s Settlement Mean Upside for Point72?Steve Cohen’s Point72 Management Steve Cohen is a very high-profile investor whose SAC capital returned 30% annually for more than 20 years. In 2012, the firm was found guilty of
- InvestorPlace•21 hours ago
Going Into Earnings, Is Visa Stock Everywhere You Want It to Be?
Visa (NYSE:V) is slated to reports its second-quarter earnings on Apr. 24 after the market closes. The payments processing giant continues to build market share and establish a reputation for beating earnings estimates, enabling Visa stock to trade near its all-time highs.Source: Shutterstock However, the company has begun to lose one high-profile customer. Moreover, a well-funded competitor has entered the credit-card business. Those developments could cause some owners of V stock to question its rising price-earnings multiple. * 7 Stocks to Buy for Spring Season Growth Although those issues don't pose an immediate threat to Visa's dominance, they could make investors think twice about buying Visa stock at its current levels.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Visa Should Beat Analysts' Estimates, But Is That Enough?For the second quarter, analysts on average expects Visa's earnings per share to come in at $1.24. If Visa hits that target, its EPS will have risen 11.7% year-over-year. Analysts' consensus revenue estimate is $5.46 billion, versus the $5.07 billion of revenue that the company reported in the same quarter of 2018.Since V has exceeded analysts' consensus earnings expectations in each of the previous four quarters, its Q2 results will probably beat the consensus outlook as well. As our society continues to increasingly give up cash, Visa and its peers should continue to benefit from that trend.Furthermore, Visa continues to gain market share from archrival Mastercard (NYSE:MA) as well as peers such as American Express (NYSE:AXP) and Discover (NYSE:DFS). As late as the third quarter of last year, Visa claimed more than 61% of total U.S. card volume. That makes Visa stock a compelling long-term buy on any pullback, even if the company's Q2 results are surprisingly negative.However, I see signs that the short-term outlook of Visa is not entirely positive. The price-earnings ratio of Visa stock now stands at around 34.5. That comes in slightly ahead of the long-term average multiple of V stock, which is about 32.6. Since Visa's profit is expected to increase 15.2% this year, I think Visa stock price is mildly overvalued.Meanwhile, V stock looks less than compelling when investors can buy AXP stock at about 14 times its earnings. By buying AXP, whose profits are expected to rise 11% this year, traders obtain about 72% of the growth of Visa at around 40% of the price. Visa Stock Faces Rising ThreatsAlso, Visa has used its dominant position to raise the fees that it charges merchants. That has prompted Kroger (NYSE:KR) to refuse to accept Visa cards at some of its locations. For now, Kroger is only refusing to accept Visa's credit cards at 21 of its Foods Co. stores in California. However, it will soon extend this ban to both its Smith's Food and Drug stores and its fuel centers in seven states.That places V in an awkward position. If Kroger stops accepting Visa at all of its stores or if other retailers start refusing to accept Visa cards at some of their stores, Visa's revenues could meaningfully drop. However, if Visa relents and lowers its fees, that will likely reduce its profits, negatively impacting Visa stock.Moreover, Apple (NASDAQ:AAPL) has partnered with Goldman Sachs (NYSE:GS) and Mastercard on its new Apple Card. At first glance, the card provides some benefits, such as faster cash-back rewards and enhanced security, since it does not use numbers.Still, it appears that the card will limit most of those benefits to consumers who are already using Apple's iOS ecosystem. For that reason, I would not expect the Apple Card to supplant Visa's dominant position. However, Apple Card could take market share from Visa, negatively impacting the Visa stock price. Concluding Thoughts on Visa StockAlthough Visa will more than likely post higher-than-expected earnings and revenue, emerging competitive threats could create doubts about Visa stock.Meanwhile, the valuations of Visa stock have begun to climb above their long-term averages. Also, Visa's rising fees have started to prompt merchants to push their customers to other cards. Furthermore, the Apple Card will give consumers another reason to avoid Visa.Despite the new threats, Visa stock should continue to benefit from double-digit profit growth. However, retailers and customers will take advantage of the lower fees of Visa's peers. Also, traders can invest in a credit-card network at a much lower multiple by buying AXP stock.As a result, the driving force of Visa stock could be the rising threats of better alternatives for multiple players. That does not mean investors should sell Visa stock. But investors still need to account for those dangers when they're considering buying V stock.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy for Spring Season Growth * This Is How You Beat Back a Bear Market * 7 Dental Stocks to Buy That Will Make You Smile Compare Brokers The post Going Into Earnings, Is Visa Stock Everywhere You Want It to Be? appeared first on InvestorPlace.
- Zacks•22 hours ago
Visa (V) Reports Next Week: Wall Street Expects Earnings Growth
Visa (V) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
- Market Realist•yesterday
Visa: Analysts Are Bullish before Its Earnings
What to Expect from Visa's Q2 Earnings(Continued from Prior Part)Price revisions in April Visa (V) has seen three upward revisions in its target price in April. On April 10, Cowen increased its target price for Visa from $161 to $177. On April 8,
- TheStreet.com•yesterday
Amazon, Visa and Caterpillar Report Earnings Next Week - Here's What to Expect
Spring earnings season is in full swing, and investors are getting a clearer look at their favorite stock's true market position. stock surged after the bank's first-quarter earnings beat analysts' expectations by 30 cents a share. stock is already showing strong growth, up 21% this year and outpacing the S&P 500's 15% gain.
- Investing.com•yesterday
Crypto Prices Rise; Visa and Coinbase to form partnership
Investing.com - Cryptocurrencies prices rose on Wednesday in Asia. News that Visa (NYSE:V) and Coinbase are forming a partnership to launch a cryptocurrency card received some attention.
- Market Realist•2 days ago
How Visa Stock Might Perform until Its Earnings
What to Expect from Visa's Q2 Earnings(Continued from Prior Part)Visa’s implied volatilityLet’s take a look at how Visa (V) stock might perform until its earnings release on April 24. The implied volatility in Visa fell by ~12.5 percentage
- Market Realist•2 days ago
What Might Drive Visa’s Q2 Earnings Growth?
What to Expect from Visa's Q2 Earnings(Continued from Prior Part)Key indicators Economic growth, consumer spending, retail sales, and revolving credit growth are some of the key indicators that impact card companies’ performance. Let’s take a
- Market Realist•2 days ago
Will Visa Exceed Its Earnings Estimates Again?
What to Expect from Visa's Q2 EarningsVisa Visa (V) is scheduled to report its second-quarter earnings on April 24. In the quarter ending December 31, Visa reported 7% sequential and 20% YoY (year-over-year) growth in its EPS. The strong earnings
- InvestorPlace•2 days ago
AXP Earnings Look Key for American Express Stock
It seems overly anxious to argue that American Express (NYSE:AXP) stock needs big first-quarter results. After all, American Express stock is doing just fine, even if it's been quiet.Source: Shutterstock AXP stock did dip sharply in December, but it's recovered those losses. Over the last year, American Express stock has gained nearly 17%, and it has more than doubled in the last three-plus years. * 7 Dental Stocks to Buy That Will Make You Smile Still, AXP earnings, due to be reported on Thursday morning, do look reasonably important. The outlook of AXP stock still seems somewhat skeptical, if not outright bearish. Investors are worried about its growth and market share. Its Q4 earnings were disappointing, but the market quickly moved on and kept pushing American Express stock higher. Investors may not be so forgiving if AXP earnings are disappointing again on Thursday.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAXP stock has twice failed to break through resistance at about $113, and the average Street price target for American Express stock of $118 suggests an increase of just 6% from its current level.A "beat and raise" Q1 would likely cause analysts to raise their price targets on AXP stock, leaving AXP well-positioned to reach new highs. If AXP earnings miss expectations, however, investors may have concerns about AXP's growth, causing American Express stock to at best trade sideways, as it has for nearly seven months now.As a result, Thursday's earnings do seem to be important for American Express stock, and investors should review them closely. Expectations for AXP EarningsWall Street is expecting a moderately slow start to the year for American Express. Analysts' consensus revenue estimate projects just 7.6% year-over-year, top-line growth, below the company's full-year guidance of 8%-10%. The company's margins are expected to be pretty much flat, and analysts on average expect its earnings per share to come in at $1.98, up 6.5% year-over-year.That, too suggests improvement over the rest of the year. Consensus for 2019 as a whole is modestly above the midpoint of the company's guidance, and projects 11% EPS growth.That's good news for AXP stock. AXP is not exactly in a "no-lose" situation, but analysts already expect its growth to accelerate as the year goes on. An in-line quarter, or even a modest miss, won't necessarily endanger that outlook.On the other hand, if AXP results solidly beat expectations, its outlook may get more interesting. Under that scenario, American Express will have started the year strongly, and will still have the same room for improvement during the rest of the year. Full-year growth estimates may well get raised, and the earnings multiple assigned to American Express stock can also rise. If that occurs, AXP can reach new highs. AXP Stock and the Post-Earnings CallThat said, the numbers aren't going to be the only aspect of the release to which investors will pay close attention. American Express re-upped its partnership with Delta Air Lines (NYSE:DAL) earlier this month. That was a big win for AmEx, which already had lost co-branding agreements with Costco Wholesale (NASDAQ:COST) and JetBlue Airways (NASDAQ:JBLU).But American Express had to pay up for the win. It was Delta stock that soared on the news, given that its payments from the deal will double in five years. The end results of that negotiation certainly suggests that American Express' edge over rivals Visa (NYSE:V) and Mastercard (NYSE:MA) has narrowed.So investors will have concerns about AXP's cost and market share Visa and Mastercard simply are growing faster than AmEx. And the main concern about American Express - and the reason AXP stock is so much cheaper than V and MA - is that at some point, its earnings simply are going to stall out. The entrance of Apple (NASDAQ:AAPL) into the space only adds to those worries.There likely will be some questions about the Delta deal and the kind of returns American Express expects on the resulting $3 billion-plus increase in annual spending. Analysts will want management's take on the Apple Card as well. AmEx needs to answer those questions well, and it needs to convince analysts and investors that its place in the credit-card industry is secure. Be Careful With American Express StockAll told, AXP's Q1 results do seem poised to change the outlook of AXP stock. A beat-and-raise quarter will suggest that AXP's growth remains intact, making the 12.4 forward, price-earnings multiple of AXP stock seem awfully cheap. Any weakness - whether in the company's results or its guidance - will cause investors to ask if fears about AXP's growth are reasonable.That doesn't mean AXP stock is going to move 10% or more on Thursday; AXP simply isn't that type of stock. Rather, AXP's Q1 earnings could shape how American Express stock trades over the next two months and determine whether AXP stock can finally break through resistance.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Internet Stocks to Watch * 7 AI Stocks to Watch with Strong Long-Term Narratives * 10 Dow Jones Stocks Holding the Blue Chip Index Back Compare Brokers The post AXP Earnings Look Key for American Express Stock appeared first on InvestorPlace.
- Zacks•2 days ago
MoneyGram Partners KyckGlobal to Serve Gig Economy Workers
MoneyGram (MGI) collaborates with fintech company KyckGlobal to facilitate fast cash payments to gig economy workers.
- Zacks•2 days ago
The Zacks Analyst Blog Highlights: JPMorgan, Visa, Chevron, TJX and General Dynamics
The Zacks Analyst Blog Highlights: JPMorgan, Visa, Chevron, TJX and General Dynamics
- Zacks•3 days ago
Visa (V) Gains As Market Dips: What You Should Know
Visa (V) closed at $160.33 in the latest trading session, marking a +0.43% move from the prior day.
- Zacks•3 days ago
Top Stock Reports for JPMorgan, Visa & Chevron
Top Stock Reports for JPMorgan, Visa & Chevron
- InvestorPlace•3 days ago
Square Stock Is Taking a Breather, but There’s Lots More Growth Ahead
Since the company's initial public offering, Square (NYSE:SQ) blitzkrieged its way to the top of the markets. While shares have come down substantially from its peak, it's still a winner by almost any measure. For example, on a year-to-date basis, Square stock has gained a very impressive 38%.Source: Chris Harrison via Flickr (Modified)I first came across Square's payment-processing device at an auto-repair shop. My car's windshield suffered a severe-enough crack that required replacement. Once the work was done, I pulled out my credit card. The shop's owner took out his Square-armed smartphone and swiped my card. At that moment, I should have invested in Square stock.Of course, the key to the tech firm's success is disruption. What I recognized on the day my windshield died was that independent companies can finally compete with the big boys. Prior to Square and its innovative device, small-business owners had to invest in clunky machines tied to often-unfavorable contracts.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWith Square came capacity and freedom. It was a simple idea with a small touch, but it worked. The payment-processing device leveled the playing field, essentially forcing businesses to compete on product and service quality, not resource advantages. That alone is enough for most people to consider buying Square stock. * 7 Marijuana Companies: Which Pot Stocks Should You Buy? Another reason is the growth of small business in America. Last year, this segment employed nearly 48% of the private-sector workforce. Even more impressive, small businesses number over 30 million.However, not everything surrounding SQ stock is bullish; namely, the share price. While SQ has skyrocketed since the start of the year, it's gone flat since mid-February. That worries folks because it appears the tech firm can go either way.Does Square stock have another catalyst to run on? Square Stock to Ride Disruption Narrative 2.0It turns out, SQ has another long-term story that can shake shares out of its present funk. In the first go-around, the company completely overturned the payment-processing sector. Now, management is turning its attention toward the payment platform itself.Earlier this year, Square announced that it would launch a new debit card aimed at small businesses. While the concept is hardly novel, this particular variation offers unique benefits.For instance, the Square card allows business owners to immediately spend the funds that they earn through their company's sales. This way, owners don't have to wait until the revenues hit their bank accounts, thereby improving cash flow.Another intriguing factor boosting prospects for the card and SQ stock is the purchase discount. If a card-holder elects to do business with fellow Square merchants, he or she will receive a 2.75% discount. That's a sizable benefit, especially compared to traditional charge cards' miserly offerings.In turn, KeyBanc analyst Josh Beck reiterated his "overweight" rating, as well as his $100 target for Square stock. But Beck also noted that Square's debit card will perform better than most people expect. I completely agree with him.Beck addresses the broader narrative, pointing out that roughly 40% of small businesses don't have a business-specific charge card. In other words, this is a grossly-underserved market that SQ can penetrate and later dominate.But what I view as critically important are the nuanced benefits. For instance, the Square card allows users to easily separate business and personal expenses. That might not seem like a big deal until tax season. Then, it can really save much frustration.I suspect that word-of-mouth of all platforms can drive home the conveniences of the Square card. This should eventually translate to a higher price for SQ stock. Demographics and SQ StockIf that doesn't convince you that Square stock is likely to move higher, consider demographic behaviors. Millennials don't just represent the largest workforce in the U.S. Increasingly, they've proven to the most entrepreneurial-minded.According to one survey, 66% of young Americans aspire to start their own businesses. Not only that, this trend crosses international borders. Oxford University released data that showed that the number of entrepreneurial-focused students increased significantly in recent years.Naturally, this rising trend bolsters the long-term case for Square stock. But it goes beyond that. You see, Square doesn't just provide tools in the way that Visa (NYSE:V) or Mastercard (NYSE:MA) does. Instead, it provides simple but effective platforms that encourage business growth.Again, you might think on the surface that differentiating personal and business expenses is a minor concept. And actually, you'd be right. However, it also mitigates one of the most cumbersome administrative tasks associated with owning a business. That's the type of smart thinking that separates SQ stock from the rest.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Best Dividend Stocks to Buy for Every Investor * 7 Catalysts That Will Send Marijuana Stocks Soaring in 2019 * 8 Risky Stocks to Watch as Earnings Season Kicks Off Compare Brokers The post Square Stock Is Taking a Breather, but There's Lots More Growth Ahead appeared first on InvestorPlace.
- Investing.com•3 days ago
Crypto Wrap: Digital Currency Prices Slip after Hitting 2019 Highs
Investing.com - Cryptocurrency prices are down slightly since hitting a 2019 high last Wednesday on news that Visa (NYSE:V) is launching a crypto card with Coinbase.
- Motley Fool•5 days ago
Better Buy: Mastercard vs. Visa
Which payment processing giant's stock is the stronger choice for new money now?
- Investing.com•8 days ago
Crypto Down; Coinbase Launches Crypto-enabled Debit Card
Investing.com - Major cryptocurrencies were trading in the red on Thursday morning in Asia, but Bitcoin still remained above the $5,000 level despite the bearish sentiment.
- InvestorPlace•8 days ago
Is Visa Stock Still a Long-Term Buy After 30%+ Run?
Visa (NYSE:V), stock is up more than 30% over the past year, stoked, in part, by Federal Reserve rate hikes that have translated into higher profit margins for credit card companies. The overall fundamental strength of the company has also been the catalyst behind the V stock returns.The world's largest retail electronic payments network, Visa, is expected to report earnings on Apr. 24. There could be some volatility and profit-taking in V stock in April, especially as many other financial services firms also report in the coming weeks. However, I'd encourage long-term investors who would like exposure to the sector to regard any dip in the share price as an opportunity to add Visa stock to their portfolio. Long-Term V Stock StrengthsRobust Fundamental Numbers: Visa is a quality blue-chip company with a $345 billion market cap. The group does not issue credit cards or lend money. Instead, the company operates as an "intermediary," charging a fee on each of the 150 million transactions its network handles every day.InvestorPlace - Stock Market News, Stock Advice & Trading TipsVisa has three sources of revenue: * Service revenues (for services provided to card issuers for the use of Visa products); * Data processing revenues (fees Visa collects for the authorization, settlement, or clearing); and, * International transaction revenues (for cross-border and currency conversion transactions).Visa's revenue for the quarter ending Dec. 31, 2018 was $5.51 billion, a 13.25% increase year-over-year. The company saw double-digit growth in payments volume, cross-border volume and processed transactions for Q4 and full-year.As one of the major credit and debit card processors, Visa has strong pricing power and a good profit margin that stands at almost 55%. Visa's leadership position in the industry requires financial flexibility so that the management can continue the growth-centric steps. Its current ratio, which measures Visa's ability to pay off short-term liabilities with its current assets, is a healthy 1.65.Wall Street expects Visa's profitability and robust financial metrics to continue in the coming quarters, too -- a fact that should bring higher prices for V stock.Mobile Payments Space: Many of us have already paid for something with our smartphones at least once as mobile payments are fast becoming a convenient and swift method to pay bills or make transfers. Analysts expect the global market to reach $4.5 trillion by 2023.The most widely used transaction methods include contactless payments without entering the credit card PIN number at the point-of-sale or using a smartphone to pay a merchant or even a person such as a friend or family member, i.e., peer-to-peer (P2P) payments. * 7 High-Risk Stocks With Big Potential Rewards If you are looking at ways to benefit from this trend, Visa may be a solid company to consider. It's been boosting its mobile payment offerings. As early as 2011, the group took a stake in Square (NYSE:SQ), the San Francisco-based credit card processing fintech, which was founded in 2009. There are rumors that Visa may end up acquiring Square.Its other strategic investments include Stripe and Marqeta. It's currently bidding to buy Earthport, a British payments company.Over the past decade, smartphones have become a part of our daily lives and it would not be wrong to expect mobile payments to enter our daily lives in a big way. In other words, as more consumers tap to pay or download an app to transfer money, Visa investors are likely to reap the rewards. What Could Derail Visa Stock?Short-term Technical Analysis and Price Charts: Year-to-date, Visa is up 19%. So, in the next few weeks, there might be some profit taking in V stock. As a result of the recent impressive run-up in the stock price, short-term technical indicators have become somewhat over-extended. Investors who pay attention to short-term oscillators should note that Visa's technical message has also become "overbought."In April and May, Visa stock could trade sideways for several weeks, and even have a pullback toward the low-$140's or even mid-$130's level, where the stock is likely to find major support.Visa stock's beta is 0.99, which means its volatility on average mimics that of the broader market. Therefore if the industry or the broader market declines as the companies release earnings, V stock price may also be adversely affected.If you already own Visa shares, you might want to hold your position. That said, if you are worried about short-term profit taking, then within the parameters of your portfolio allocation and risk/return profile, you may consider placing a stop loss at about 3-5% below the current price point, to protect your profits to date.I would not advocate bottom-picking in case of near-term price weakness. Yet, I find Visa stock to be a compelling buy candidate and by the end of 2020, I'd expect the shares to reach $185.Competition in the Mobile Payment Payments Space: The fintech revolution is evolving and the entire payments industry is growing fast. In addition to Visa, several other U.S. companies are leading the mobile-payment race that requires cutting-edge technology. In October 2014, Apple (NASDAQ:AAPL) introduced Apple Pay which has now become one of the dominant digital payment apps in the U.S.In the P2P space, investors love PayPal (NASDAQ:PYPL) which owns the popular Venmo app. The app has over 25 million users and is ahead of its closest competitors -- Apple's Pay Cash, Square's Cash App, and Zelle, which is owned by Early Warning Services, a private fintech company. * 8 Risky Stocks to Watch as Earnings Season Kicks Off If there are other strong earnings reports or news from Visa's competitors hit the wires, there may be short-term volatility or decline in V stock price. However, Visa is a solid company with continued growth prospects in mobile payments. Therefore small price dips on daily headlines should not keep long-term investors up at night. Bottom Line on Visa StockVisa stock is a fundamentally sound stalwart investment with further growth prospects, leadership in the respective market, and proactive management -- factors that are likely to translate into a strong balance sheet and robust bottom line in the rest of the decade.Investors who are interested in financial services, but do not want to commit all their capital to a single stock such as Visa may also consider investing in various exchange-traded Funds (ETFs) that have Visa as a holding, including iShares U.S. Financial Services ETF (NYSEARCA:IYG), ISE Mobile Payments ETF (NYSEARCA:IPAY), or Vanguard Information Technology ETF (NYSEARCA:VGT).As of this writing, Tezcan Gecgil did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Medical Marijuana Stocks to Cure Your Portfolio * 8 Best Stocks to Buy for an April Rally * Top 20 Stocks to Buy for 20-Somethings! Compare Brokers The post Is Visa Stock Still a Long-Term Buy After 30%+ Run? appeared first on InvestorPlace.
- Zacks•9 days ago
Visa (V) Stock Moves -0.07%: What You Should Know
In the latest trading session, Visa (V) closed at $157.65, marking a -0.07% move from the previous day.
- Investopedia•9 days ago
Visa and Mastercard Could Trap Complacent Shareholders
Visa and Mastercard stocks have hit extremely overbought price levels and could turn sharply lower in the coming weeks.
- InvestorPlace•11 days ago
Will Apple’s Pivot to Services Reignite Its Growth Story?
Apple (NASDAQ:AAPL) has dramatically underperformed over the past six months. AAPL stock is still down nearly 20% from its recent peak, whereas the stock market as a whole is approaching new all-time highs. And tech stocks, in general, have led the 2019 rebound, leaving Apple in the dust.Source: Apple It's not hard to see why. In January, Apple shocked the world with a sales warning. That was the first time Apple issued a sales warning since way back in 2002. Now, to be fair, this isn't the first time that Apple has had a soft hardware cycle.Apple's revenues turned negative year over year in both 2013 and 2016 during the iPhone 5 and iPhone 6s cycles.InvestorPlace - Stock Market News, Stock Advice & Trading TipsStill, this is arguably the worst hardware sales period for Apple within the iPhone age, given the revenue warning. And investors have been slow to forgive AAPL stock. * 7 A-Rated Healthcare Stocks for Industry Expansion For one thing, CFO Luca Maestri said just months earlier that Apple was anticipating its strongest holiday line-up and sales yet. So to miss on sales by billions of dollars for the quarter came as quite the blow. Not surprisingly, Apple is refocusing investor attention elsewhere with its new push. Apple's Hardware Sales Are Reaching LimitsOn various occasions, I've suggested that Apple has been an anomaly in that it can make serious money on hardware. In general, tech companies that make big profits in hardware tend to lose strength quickly. It's simply too easy for competitors to make similar products at lower prices. For every Apple that dominates a field for ages, you have a Nokia or Blackberry (NYSE:BB) that has a few peak years and then fades to irrelevancy.However, it's starting to look like even Apple is running into limits in terms of how much profits it can wring out of hardware. The addressable share of the market for high-end smartphones is only so large. Particularly in emerging markets, most people will buy cheaper options from the likes of Samsung or Huawei. And even on iPhone pricing, there appears to be a ceiling where some people say enough is enough.Throw in how powerful the average iPhone is now, and users feel less compelled to upgrade with every new product launch. In general, there simply isn't a must-have feature with each new model that drives upgrades if users' previous phone is still working and holds a good charge. Apple Turns to ServicesLast week, Apple announced a ton of new and improved service offerings. Arguably the most interesting and important of these was the news of an Apple Card to take on the likes of Visa (NYSE:V). Partnering with Goldman Sachs (NYSE:GS) and Mastercard (NYSE:MA) for payment processing, the Apple Card could theoretically be a serious rival to Visa. That wasn't it for announcements though. Apple is also rolling out an improved version of Apple TV, an Apple News feature, and an Apple Arcade gaming service.In theory, these could all be interesting additions for Apple that could add significant revenue streams. Apple News, for example, by offering a subscription service for journalism could help that industry turn its fortunes around in the digital age, as Spotify (NYSE:SPOT) did for music. It's unlikely to generate big revenues for Apple at least in the near term though. Same for the arcade, which may shift revenues from in app purchases to subscription but is unlikely to make the overall pie much bigger, at least in the short run.And for the bigger announcements, there are serious questions about both. Apple TV+ seems too small to be a serious Netflix (NASDAQ:NFLX) challenger. If Apple spends $1 billion a year on original content, that's something, but it's only a drop in the bucket compared to Netflix's $8 billion budget, to say nothing of Disney (NYSE:DIS) and other traditional content creators. And over in credit cards, our Josh Enomoto described how Apple's card is a "gimmicky" offering which brings more "hype than substance". For now, Apple has a lot left to prove with its new services offerings. AAPL Stock VerdictCompared to other tech stocks, AAPL stock looks attractive by comparison. Assuming the market continues moving to new all-time highs, it's not hard to imagine AAPL stock playing catch-up and moving back toward its own previous high at $233/share.In the longer-run, however, I remain an Apple skeptic. The company has largely tapped the growth potential of its major developed markets. People who are going to buy Apple smartphones are already doing so - where's the new marginal consumer that hasn't bought Apple products yet?Meanwhile, in emerging markets, Apple faces a huge challenge. They don't have the same sort of lock-in that they do on consumers in developed markets. In China in particular, which was supposed to be Apple's next big thing, sales are instead going the other direction. That's because WeChat, which runs on all smartphones, is the key must-have application, rather than Apple OS. Chinese consumers are increasingly happy to use other smartphone makers, as Apple OS and its associated ecosystem isn't a primary selling point that makes customers loyal.Overall, Apple's move to services is probably a smart play. Recurring revenue is a great business model, and Wall Street will bid your stock up as you get more of it. In certain markets, such as the U.S., Apple services will probably deliver major growth. As we've seen overseas, however, with something like Apple Music versus Spotify, Apple's brand matters much less in emerging markets. And as such, Apple services probably won't be enough, at least on its own, to make up for stagnating hardware sales.At the time of this writing, Ian Bezek owned GS stock and had no positions in any of the other aforementioned securities. You can reach him on Twitter at @irbezek. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 5 Data Center Buys That Deliver Sizable Income * 7 High-Risk Stocks With Big Potential Rewards * 3 Marijuana Stocks to Watch as New York, New Jersey Delay Legalization Compare Brokers The post Will Apple's Pivot to Services Reignite Its Growth Story? appeared first on InvestorPlace.
- Reuters•13 days ago
UK competition watchdog probes Visa's acquisition of Earthport
Visa agreed to buy Earthport for about 247 million pounds ($321.45 million), edging out smaller rival Mastercard Inc in a bidding war. Visa expects the deal to help expand its cross-border network service, a reason also cited by Mastercard for its interest in Earthport. Earthport offers a lower-cost option to traditional payments systems by allowing banks and money transfer firms to have a single relationship instead of multiple ties with various payments channels around the world.
