Visa, Inc.

Visa, Inc. (V) has positioned itself to benefit from strong international growth opportunities in areas such as Asia and Europe. The company reported 38% growth rate in volumes from these markets, helping to temper the effect of the weakened domestic consumer environment.

Visa, Inc., through its subsidiaries, operates a network of retail electronic payments worldwide. The company was founded in 1958, has a market cap. of $58 billion and is headquartered in San Francisco, California.

A Solid Third-Quarter

Visa has only been traded publicly for a short while, but the company is pleasing its investors by producing impressive earnings, as seen by the company's third-quarter results, reported on July 30.

Revenue was up 17.5% from last year to $1.61 billion. Net income surged ahead to $422 million, up from $299 million a year ago while the company was still privately controlled. Excluding one-time charges, this produced earnings of 59 cents per share, ahead of analyst expectations of 48 cents per share.

This is the second time Visa has surprised and beaten analyst estimates in its last 2 quarters, having done so by an average of 8 cents, or 17%.

Strong International Presence

In spite of the economic slowdown, which dampens traditional spending habits and the use of credit, Visa reported strong results from its debit card segment.

Visa's CEO Joe Saunders said that, "Despite a challenging economic environment in the United States and a softening in traditional credit card spending, the strength of Visa's debit business drove solid growth in the region." Mr. Saunders indicated the company is experiencing strong expansion in a number of regions across the world, including Asia Pacific, Latin America and the Middle East.

Business volumes outside of the U.S., which account for 38% of Visa's business, grew at a rate of 31%.

Estimates and Valuations

After the good quarter, analysts raised their estimates, with the current-year estimate tacking on 16 cents and advancing to $2.15 per share.

At these levels, this is not a cheap stock, trading with a forward P/E multiple of 33X.

The Chart

Shares of Visa have traded mostly sideways for the last 3 months after topping off above $89 in early May. Take a look at the chart below.

Read the full analyst report on V