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

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Visa (V - Free Report) closed at $200.32 in the latest trading session, marking a +1.56% move from the prior day. This move lagged the S&P 500's daily gain of 1.61%. Meanwhile, the Dow gained 1.51%, and the Nasdaq, a tech-heavy index, added 1.87%.

Coming into today, shares of the global payments processor had lost 6.53% in the past month. In that same time, the Business Services sector lost 4.04%, while the S&P 500 lost 4.08%.

Wall Street will be looking for positivity from V as it approaches its next earnings report date. The company is expected to report EPS of $1.10, down 25.17% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.03 billion, down 18.01% from the prior-year quarter.

V's full-year Zacks Consensus Estimates are calling for earnings of $5.01 per share and revenue of $21.78 billion. These results would represent year-over-year changes of -7.9% and -5.21%, respectively.

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. As a result, we can interpret positive estimate revisions as a good sign for 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 remained stagnant. V is currently a Zacks Rank #3 (Hold).

Digging into valuation, V currently has a Forward P/E ratio of 39.37. This represents a premium compared to its industry's average Forward P/E of 25.95.

It is also worth noting that V currently has a PEG ratio of 3. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Financial Transaction Services stocks are, on average, holding a PEG ratio of 1.49 based on yesterday's closing prices.

The Financial Transaction Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 66, which puts it in the top 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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