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We’re into the heart of earnings season, with many companies unveiling quarterly results daily. This week is a busy one in particular, with every sector of the economy being represented.
Soon, we’ll hear from Visa (V - Free Report) and Mastercard (MA - Free Report) . Below is a chart illustrating the year-to-date performance of each, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
As we can see, Visa shares have nicely outperformed the S&P 500, while Mastercard shares have lagged. Both quarterly reports will be mighty important, as they’ll provide a deeper view into consumer activity.
But how do the companies shape up heading into their quarterly releases? Let’s take a closer look.
Visa
For Visa’s upcoming print, the Zacks Consensus EPS Estimate of $1.97 implies an improvement of more than 10% from the year-ago quarter. In addition, our consensus revenue estimate stands at $7.7 billion, representing Y/Y growth of 7.8%.
it’s worth noting that the quarterly EPS Estimate has remained unchanged over the last 60 days, perhaps reflecting a neutral view from analysts.
Image Source: Zacks Investment Research
The company’s earnings track record is rock-solid, with Visa exceeding both earnings and revenue expectations in each of its last ten quarters. In its latest quarterly release, V penciled in an 8.5% bottom line beat and reported revenue 3.4% ahead of expectations.
As we can see in the chart below, the market has reacted well to the company’s latest two releases, with shares seeing buying pressure post earnings.
Image Source: Zacks Investment Research
There are several key metrics investors should keep their eyes on, including Total Payments Volume. This metric will provide us a deeper view on the state of the company’s top line and consumer base, as Visa earns fees from payment transactions.
For the quarter, the Zacks Consensus Estimate for Total Payments Volume suggests a 5.7% year-over-year increase. Visa has fallen short of the Zacks Consensus Estimate for the metric in three consecutive quarters, as we can see in the chart below.
Image Source: Zacks Investment Research
Heading into the release, Visa is a Zacks Rank #2 (Buy) with an Earnings ESP Score of 1.6%.
Mastercard
Analysts have moved their earnings expectations slightly higher for the quarter to be reported, with five positive revisions hitting the tape over the last 60 days. The Zacks Consensus EPS Estimate of $2.71 indicates a slight 1.8% pullback in earnings year-over-year.
Image Source: Zacks Investment Research
Mastercard is expected to post solid revenue growth, with the $5.6 billion consensus estimate implying an improvement of nearly 9% year-over-year. And similar to Visa, Mastercard has had little issue exceeding quarterly estimates, exceeding top and bottom line expectations in nine consecutive quarters.
The market wasn’t impressed with the latest quarterly print, as we can see illustrated in the chart below.
Image Source: Zacks Investment Research
We can take a look at the company’s Gross Dollar Volume (GDV) expectations to better understand sentiment within MA’s consumer base, similar to Visa. For the quarter, the Zacks Consensus Estimate for Gross Dollar Volume suggests an increase of 7% from the year-ago quarter.
Mastercard has primarily fallen short of the Zacks Consensus Estimate for this metric, illustrated below.
Image Source: Zacks Investment Research
Going into earnings, Mastercard is a Zacks Rank #3 (Hold) with an Earnings ESP Score of -0.9%.
Bottom Line
With earnings season shifting into higher gear, investors will remain busy sorting through many quarterly results daily.
And soon, we’ll hear from Visa (V - Free Report) and Mastercard (MA - Free Report) . For both companies, overall volumes will be closely watched, as it’ll tell us if consumers are pulling back spending in the face of a highly-unique economic backdrop.
But are they buys heading into earnings? For value-focused investors, Visa may not appear as attractive, with the company’s current forward earnings multiple reflecting a notable premium relative to the five-year median.
On the flip side, Mastercard’s 30.8X forward earnings multiple is cheap but on a relative basis, with the value well beneath the 34.9X five-year median.
For long-term investors, the picture remains bright; Visa and Mastercard are both expected to post double-digit percentage earnings growth in their current and next fiscal years.
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Visa and Mastercard Earnings: What to Expect
We’re into the heart of earnings season, with many companies unveiling quarterly results daily. This week is a busy one in particular, with every sector of the economy being represented.
Soon, we’ll hear from Visa (V - Free Report) and Mastercard (MA - Free Report) . Below is a chart illustrating the year-to-date performance of each, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
As we can see, Visa shares have nicely outperformed the S&P 500, while Mastercard shares have lagged. Both quarterly reports will be mighty important, as they’ll provide a deeper view into consumer activity.
But how do the companies shape up heading into their quarterly releases? Let’s take a closer look.
Visa
For Visa’s upcoming print, the Zacks Consensus EPS Estimate of $1.97 implies an improvement of more than 10% from the year-ago quarter. In addition, our consensus revenue estimate stands at $7.7 billion, representing Y/Y growth of 7.8%.
it’s worth noting that the quarterly EPS Estimate has remained unchanged over the last 60 days, perhaps reflecting a neutral view from analysts.
Image Source: Zacks Investment Research
The company’s earnings track record is rock-solid, with Visa exceeding both earnings and revenue expectations in each of its last ten quarters. In its latest quarterly release, V penciled in an 8.5% bottom line beat and reported revenue 3.4% ahead of expectations.
As we can see in the chart below, the market has reacted well to the company’s latest two releases, with shares seeing buying pressure post earnings.
Image Source: Zacks Investment Research
There are several key metrics investors should keep their eyes on, including Total Payments Volume. This metric will provide us a deeper view on the state of the company’s top line and consumer base, as Visa earns fees from payment transactions.
For the quarter, the Zacks Consensus Estimate for Total Payments Volume suggests a 5.7% year-over-year increase. Visa has fallen short of the Zacks Consensus Estimate for the metric in three consecutive quarters, as we can see in the chart below.
Image Source: Zacks Investment Research
Heading into the release, Visa is a Zacks Rank #2 (Buy) with an Earnings ESP Score of 1.6%.
Mastercard
Analysts have moved their earnings expectations slightly higher for the quarter to be reported, with five positive revisions hitting the tape over the last 60 days. The Zacks Consensus EPS Estimate of $2.71 indicates a slight 1.8% pullback in earnings year-over-year.
Image Source: Zacks Investment Research
Mastercard is expected to post solid revenue growth, with the $5.6 billion consensus estimate implying an improvement of nearly 9% year-over-year. And similar to Visa, Mastercard has had little issue exceeding quarterly estimates, exceeding top and bottom line expectations in nine consecutive quarters.
The market wasn’t impressed with the latest quarterly print, as we can see illustrated in the chart below.
Image Source: Zacks Investment Research
We can take a look at the company’s Gross Dollar Volume (GDV) expectations to better understand sentiment within MA’s consumer base, similar to Visa. For the quarter, the Zacks Consensus Estimate for Gross Dollar Volume suggests an increase of 7% from the year-ago quarter.
Mastercard has primarily fallen short of the Zacks Consensus Estimate for this metric, illustrated below.
Image Source: Zacks Investment Research
Going into earnings, Mastercard is a Zacks Rank #3 (Hold) with an Earnings ESP Score of -0.9%.
Bottom Line
With earnings season shifting into higher gear, investors will remain busy sorting through many quarterly results daily.
And soon, we’ll hear from Visa (V - Free Report) and Mastercard (MA - Free Report) . For both companies, overall volumes will be closely watched, as it’ll tell us if consumers are pulling back spending in the face of a highly-unique economic backdrop.
But are they buys heading into earnings? For value-focused investors, Visa may not appear as attractive, with the company’s current forward earnings multiple reflecting a notable premium relative to the five-year median.
On the flip side, Mastercard’s 30.8X forward earnings multiple is cheap but on a relative basis, with the value well beneath the 34.9X five-year median.
For long-term investors, the picture remains bright; Visa and Mastercard are both expected to post double-digit percentage earnings growth in their current and next fiscal years.