We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can Visa (V) Sustain Its Beat Streak for Earnings in Q3?
Read MoreHide Full Article
Visa Inc. (V - Free Report) is set to report third-quarter fiscal 2021 results on Jul 27, after the market closes. Both revenues and earnings are expected to be higher for the June quarter.
Earnings & Revenue Expectations
The Zacks Consensus Estimate for Visa’s third-quarter fiscal 2021 earnings of $1.32 per share implies an increase of 24.53% from the prior-year period’s reported number. Likewise, the consensus estimate for sales of $5.82 billion suggests a 20.32% rise from the year-ago quarter’s reported figure.Factors
Factors Likely to Impact Q3 Results
Consumers as well as merchants adapted to digital payments bigtime in the face of the ongoing pandemic, given the ease, convenience and security the same offers. These trends bode well for this payment processor.
The company draws revenues as a set percentage of the total transaction value everytime a customer’s debit/credit card is used for making payments. Thus, higher spending on its cards means more revenues in the form of transaction processing fees.
After witnessing low spending last year due to COVID-19, Visa’s operational metrics, such as payment volumes (the primary lever of service revenues), processed transactions (the primary driver of data processing revenues) and cross-border volumes are likely to have bettered in the to-be-reported quarter. Pent-up demand, bigger savings and an upbeat consumer sentiment prompted people to spend more in recent months. Retail sales have been trending up higher for sometime now. These are expected to have boosted payment volumes and processed transactions for the company.
One headwind for Visa was low travel spend as people avoided taking trips. This is now recovering as Americans are resorting domestic travel.
International travel is yet to pick up the pace. It is a vital area as it contributes to cross-border revenues and emerges as a major component of the company’s top line, carrying higher margins.
A rebound in international travel was very much expected but with the Delta variant of the COVID-19 surfacing everywhere, the space can take more time to regain its lost ground.
Visa performed well in the first half of fiscal 2021 with growth registered in payments volume as well as in the number of processed transactions, reflecting better operating efficiency.
In the fiscal second quarter, management expected net revenue growth for the fiscal third quarter to be in the high teens if stable-to-improving economic trends continue.
Operating expenses are likely to have escalated amid stepped up investments for marketing and key initiatives to capture growth opportunities.
Earnings Surprise History
The company boasts an attractive earnings surprise record with its bottom line having surpassed estimates in each of the last four quarters, the average being 7%. This is depicted in the chart below:
Our proven model predicts a beat for Visa this earnings season. The combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — increases the odds of a positive surprise, which is the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Image: Bigstock
Can Visa (V) Sustain Its Beat Streak for Earnings in Q3?
Visa Inc. (V - Free Report) is set to report third-quarter fiscal 2021 results on Jul 27, after the market closes. Both revenues and earnings are expected to be higher for the June quarter.
Earnings & Revenue Expectations
The Zacks Consensus Estimate for Visa’s third-quarter fiscal 2021 earnings of $1.32 per share implies an increase of 24.53% from the prior-year period’s reported number. Likewise, the consensus estimate for sales of $5.82 billion suggests a 20.32% rise from the year-ago quarter’s reported figure.Factors
Factors Likely to Impact Q3 Results
Consumers as well as merchants adapted to digital payments bigtime in the face of the ongoing pandemic, given the ease, convenience and security the same offers. These trends bode well for this payment processor.
The company draws revenues as a set percentage of the total transaction value everytime a customer’s debit/credit card is used for making payments. Thus, higher spending on its cards means more revenues in the form of transaction processing fees.
After witnessing low spending last year due to COVID-19, Visa’s operational metrics, such as payment volumes (the primary lever of service revenues), processed transactions (the primary driver of data processing revenues) and cross-border volumes are likely to have bettered in the to-be-reported quarter.
Pent-up demand, bigger savings and an upbeat consumer sentiment prompted people to spend more in recent months. Retail sales have been trending up higher for sometime now. These are expected to have boosted payment volumes and processed transactions for the company.
One headwind for Visa was low travel spend as people avoided taking trips. This is now recovering as Americans are resorting domestic travel.
International travel is yet to pick up the pace. It is a vital area as it contributes to cross-border revenues and emerges as a major component of the company’s top line, carrying higher margins.
A rebound in international travel was very much expected but with the Delta variant of the COVID-19 surfacing everywhere, the space can take more time to regain its lost ground.
Visa performed well in the first half of fiscal 2021 with growth registered in payments volume as well as in the number of processed transactions, reflecting better operating efficiency.
In the fiscal second quarter, management expected net revenue growth for the fiscal third quarter to be in the high teens if stable-to-improving economic trends continue.
Operating expenses are likely to have escalated amid stepped up investments for marketing and key initiatives to capture growth opportunities.
Earnings Surprise History
The company boasts an attractive earnings surprise record with its bottom line having surpassed estimates in each of the last four quarters, the average being 7%. This is depicted in the chart below:
Visa Inc. Price and EPS Surprise
Visa Inc. price-eps-surprise | Visa Inc. Quote
Earnings Whispers
Our proven model predicts a beat for Visa this earnings season. The combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — increases the odds of a positive surprise, which is the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Visa has an Earnings ESP of +2.55%.
Zacks Rank: Visa currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Stocks That Warrant a Look
Some other stocks worth considering with the apt combination of elements to surpass estimates this reporting cycle are as follows:
Discover Financial Services (DFS - Free Report) has an Earnings ESP of +13.41% and is presently Zacks #3 Ranked.
Global Payments Inc. (GPN - Free Report) has an Earnings ESP of +1.78% and a Zacks Rank of 2, presently.
Mastercard Inc. (MA - Free Report) has an Earnings ESP of +0.98% and a Zacks Rank of 3 at present.