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Visa (V) Jumps 25.6% in the Past Year: Will the Uptrend Last?
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Visa Inc.’s (V - Free Report) shares have jumped 25.6% in the past year, outpacing the industry's 21.2% growth, thanks to growing transactions, expansion of digital payments and improving travel numbers. The company's strategic positioning for future returns is underscored by its proactive approach to acquisitions and partnerships.
Headquartered in San Francisco, CA, Visa operates an electronic payments network all around the globe. It has a market capitalization of $474.4 billion and provides multiple value-added services to clients including fraud and risk management, debit issuer processing and others.
Image Source: Zacks Investment Research
Can It Retain Momentum?
The answer is yes and before we get into the details, let us show you how its estimates for fiscal 2024 stand. The Zacks Consensus Estimate for earnings per share for the current year is pegged at $9.90, signaling a 12.9% year-over-year increase. V beat earnings estimates in each of the last four quarters, with an average of 5.4%. The Zacks Consensus Estimate for revenues for the current year is pegged at $35.7 billion, indicating a 9.5% year-over-year rise.
Now let’s delve into what’s benefiting the Zacks Rank #3 (Hold) stock.
Visa maintains its industry-leading position by investing in technology to combat fraud, safeguard consumer and merchant information, and enhance its presence in the payments market. Platforms like VisaNet, Visa Token Service, Visa Direct and Visa Checkout underscore the company's commitment to advancing its digital capabilities. These initiatives facilitate partnerships, exemplified by its recent collaboration with International Money Express, Inc. (IMXI - Free Report) to integrate Visa Direct into its money transfer services.
Visa's strategic emphasis on judicious acquisitions to expand its network and augment capabilities through inorganic growth is a significant advantage. Notably, the recent majority share acquisition of Prosa in Mexico exemplifies its commitment to expanding its footprint and boosting payment volumes. Such strategic moves are anticipated to fortify Visa's technological prowess by leveraging global innovations.
According to 2023 Visa Global Travel Intentions Study, the post-pandemic surge in travel is resilient, showing no signs of slowing down despite inflationary pressures. The trend of 'revenge travel' is anticipated to sustain and further contribute to growth of cross-border payments for Visa. Notably, Travel Price Index of the U.S. Travel Association reveals that 73% of surveyed Americans observe an increase in travel costs, yet only 6% of travellers are delaying or cancelling their plans.
Visa maintains a robust financial position, characterized by a significant cash and investment position along with a healthy free cash flow. This financial strength supports the company's strategic acquisitions and capital expenditures, driving long-term growth. Furthermore, leveraging its strong cash position, V is dedicated to enhancing shareholders’ value.
The company has consistently increased its dividend every year since 2009, with the latest being a 16% hike in October 2023. Additionally, it introduced a new repurchase program of $25 billion in the same month. In the last reported quarter alone, it rewarded $5 billion to shareholders via share buybacks of almost $4.1 billion and dividends of $928 million.
Risks
Despite the upside potential, there are a few factors that investors should keep an eye on.
Visa faces headwinds from higher client incentives and escalating expenses. In fiscal 2024, we anticipate client incentives to rise by more than 15% year over year. Additionally, our estimate for adjusted operating expenses in fiscal 2024 indicates an 8% jump from a year ago. Nevertheless, we believe that a systematic and strategic plan of action will drive Visa’s long-term growth.
The Zacks Consensus Estimate for FirstCash’s current-year bottom line indicates 13.1% year-over-year growth. Headquartered in Fort Worth, TX, FCFS beat earnings estimates in each of the past four quarters, with an average surprise of 7.9%.
The Zacks Consensus Estimate for RB Global’s current-year bottom line suggests 15.4% year-over-year growth. Based in Westchester, IL, RBA beat earnings estimates in each of the past four quarters, with an average surprise of 18.9%.
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Visa (V) Jumps 25.6% in the Past Year: Will the Uptrend Last?
Visa Inc.’s (V - Free Report) shares have jumped 25.6% in the past year, outpacing the industry's 21.2% growth, thanks to growing transactions, expansion of digital payments and improving travel numbers. The company's strategic positioning for future returns is underscored by its proactive approach to acquisitions and partnerships.
Headquartered in San Francisco, CA, Visa operates an electronic payments network all around the globe. It has a market capitalization of $474.4 billion and provides multiple value-added services to clients including fraud and risk management, debit issuer processing and others.
Image Source: Zacks Investment Research
Can It Retain Momentum?
The answer is yes and before we get into the details, let us show you how its estimates for fiscal 2024 stand. The Zacks Consensus Estimate for earnings per share for the current year is pegged at $9.90, signaling a 12.9% year-over-year increase. V beat earnings estimates in each of the last four quarters, with an average of 5.4%. The Zacks Consensus Estimate for revenues for the current year is pegged at $35.7 billion, indicating a 9.5% year-over-year rise.
Now let’s delve into what’s benefiting the Zacks Rank #3 (Hold) stock.
Visa maintains its industry-leading position by investing in technology to combat fraud, safeguard consumer and merchant information, and enhance its presence in the payments market. Platforms like VisaNet, Visa Token Service, Visa Direct and Visa Checkout underscore the company's commitment to advancing its digital capabilities. These initiatives facilitate partnerships, exemplified by its recent collaboration with International Money Express, Inc. (IMXI - Free Report) to integrate Visa Direct into its money transfer services.
Visa's strategic emphasis on judicious acquisitions to expand its network and augment capabilities through inorganic growth is a significant advantage. Notably, the recent majority share acquisition of Prosa in Mexico exemplifies its commitment to expanding its footprint and boosting payment volumes. Such strategic moves are anticipated to fortify Visa's technological prowess by leveraging global innovations.
According to 2023 Visa Global Travel Intentions Study, the post-pandemic surge in travel is resilient, showing no signs of slowing down despite inflationary pressures. The trend of 'revenge travel' is anticipated to sustain and further contribute to growth of cross-border payments for Visa. Notably, Travel Price Index of the U.S. Travel Association reveals that 73% of surveyed Americans observe an increase in travel costs, yet only 6% of travellers are delaying or cancelling their plans.
Visa maintains a robust financial position, characterized by a significant cash and investment position along with a healthy free cash flow. This financial strength supports the company's strategic acquisitions and capital expenditures, driving long-term growth. Furthermore, leveraging its strong cash position, V is dedicated to enhancing shareholders’ value.
The company has consistently increased its dividend every year since 2009, with the latest being a 16% hike in October 2023. Additionally, it introduced a new repurchase program of $25 billion in the same month. In the last reported quarter alone, it rewarded $5 billion to shareholders via share buybacks of almost $4.1 billion and dividends of $928 million.
Risks
Despite the upside potential, there are a few factors that investors should keep an eye on.
Visa faces headwinds from higher client incentives and escalating expenses. In fiscal 2024, we anticipate client incentives to rise by more than 15% year over year. Additionally, our estimate for adjusted operating expenses in fiscal 2024 indicates an 8% jump from a year ago. Nevertheless, we believe that a systematic and strategic plan of action will drive Visa’s long-term growth.
Key Picks
Meanwhile, investors interested in the broader Business Services space may look at players like FirstCash Holdings, Inc. (FCFS - Free Report) and RB Global, Inc. (RBA - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for FirstCash’s current-year bottom line indicates 13.1% year-over-year growth. Headquartered in Fort Worth, TX, FCFS beat earnings estimates in each of the past four quarters, with an average surprise of 7.9%.
The Zacks Consensus Estimate for RB Global’s current-year bottom line suggests 15.4% year-over-year growth. Based in Westchester, IL, RBA beat earnings estimates in each of the past four quarters, with an average surprise of 18.9%.