Back to top

Image: Bigstock

Visa (V) Dips More Than Broader Markets: What You Should Know

Read MoreHide Full Article

Visa (V - Free Report) closed the most recent trading day at $196.32, moving -0.99% from the previous trading session. This change lagged the S&P 500's daily loss of 0.85%. Elsewhere, the Dow lost 0.17%, while the tech-heavy Nasdaq lost 0.05%.

Prior to today's trading, shares of the global payments processor had lost 5.02% over the past month. This has was narrower than the Business Services sector's loss of 5.55% and lagged the S&P 500's loss of 0.97% in that time.

Visa will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.70, up 19.72% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.78 billion, up 19.21% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.04 per share and revenue of $28.21 billion. These totals would mark changes of +19.12% and +17.02%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Visa. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. Within the past 30 days, our consensus EPS projection remained stagnant. Visa is currently a Zacks Rank #3 (Hold).

Digging into valuation, Visa currently has a Forward P/E ratio of 28.17. This valuation marks a premium compared to its industry's average Forward P/E of 20.38.

Investors should also note that V has a PEG ratio of 1.78 right now. 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. Financial Transaction Services stocks are, on average, holding a PEG ratio of 0.99 based on yesterday's closing prices.

The Financial Transaction Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 172, putting it in the bottom 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.

To follow V in the coming trading sessions, be sure to utilize Zacks.com.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Visa Inc. (V) - free report >>

Published in