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Visa (V) Gains But Lags Market: What You Should Know

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Visa (V - Free Report) closed at $204.06 in the latest trading session, marking a +1.97% move from the prior day. This move lagged the S&P 500's daily gain of 2.02%. Meanwhile, the Dow gained 1.6%, and the Nasdaq, a tech-heavy index, added 2.71%.

Prior to today's trading, shares of the global payments processor had gained 1.19% over the past month. This has outpaced the Business Services sector's loss of 1.56% and the S&P 500's loss of 0.39% in that time.

Wall Street will be looking for positivity from V as it approaches its next earnings report date. On that day, V is projected to report earnings of $1.10 per share, which would represent a year-over-year decline of 25.17%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.04 billion, down 17.82% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.01 per share and revenue of $21.79 billion. These totals would mark changes of -7.9% and -5.16%, respectively, from last year.

Any recent changes to analyst estimates for V should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.31% higher. V is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, V is holding a Forward P/E ratio of 39.93. For comparison, its industry has an average Forward P/E of 26.5, which means V is trading at a premium to the group.

It is also worth noting that V currently has a PEG ratio of 3.04. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. V's industry had an average PEG ratio of 1.54 as of yesterday's close.

The Financial Transaction Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 83, putting it in the top 33% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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