We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Visa (V) Poised for Q1 Earnings Beat on Transactions Growth?
Read MoreHide Full Article
Visa Inc. (V - Free Report) is set to continue its earnings beat streak in the first quarter of fiscal 2024, the results for which are expected to be released on Jan 25, after the closing bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for first-quarter fiscal 2024 earnings per share of $2.33 has remained stable over the past week. The estimate is indicative of a 6.9% increase from the year-ago reported figure. Visa beat earnings estimates in all the trailing four quarters, delivering an average surprise of 5.4%. This is depicted in the graph below.
The Zacks Consensus Estimate for revenues is pegged at $8.5 billion, suggesting a 7.1% jump from the year-ago reported figure.
What the Quantitative Model Suggests
Our proven model predicts a likely earnings beat for Visa this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is precisely the case here.
Earnings ESP: Earnings ESP for the company is currently +0.71%. The Most Accurate Estimate is currently pegged at $2.35 per share, higher than the Zacks Consensus Estimate of $2.33. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Visa currently carries a Zacks Rank #3.
Before we get into what to expect in the to-be-reported quarter in detail, let’s see how the company performed in the last quarter.
Q4 Earnings Rewind
In the last reported quarter, the payments technology company’s adjusted earnings per share of $2.33 beat the Zacks Consensus Estimate by 4.5%, primarily on the back of increased payments, cross-border volumes and processed transactions. Steady cross-border travel growth, resilient consumer spending and higher-than-expected data processing aided the results, partially offset by increased costs and client incentives.
Visa's fiscal first-quarter results are expected to be driven by the heightened spending in the travel and entertainment sectors. Furthermore, the continuous adoption and popularity of digital payment methods are expected to have persisted during the quarter, serving as key contributors to Visa's overall performance. The Zacks Consensus Estimate for fiscal first-quarter total Gross Dollar Volume indicates an increase of 6.7% from the year-ago period, whereas our model predicts nearly 6% growth.
As the company draws revenues as a set percentage of total transaction value every time a customer makes payments with a debit/credit card, higher spending means more revenues in the form of transaction processing fees. The Zacks Consensus Estimate for fiscal first-quarter total processed transactions indicates 9.5% year-over-year growth, whereas our model predicts a 9.7% increase.
The consensus mark for total payment volumes indicates an 8.7% year-over-year increase, whereas our estimate suggests 8.2% growth. We expect the metric for U.S. operations alone to jump nearly 8% year over year. Similarly, our model predicts almost 15% and 17% year-over-year growth in Europe and Latin America.
The Zacks Consensus Estimate for data processing revenues indicates 11.2% growth in the fiscal first quarter from the year-ago level of $3.8 billion, while our estimate predicts a 10% increase. Similarly, the consensus mark for service revenues suggests 10.6% year-over-year growth, whereas we expect the metric to grow more than 9%.
Furthermore, the consensus estimate for international transaction revenues indicates 9.2% growth from a year ago, whereas our model predicts a 10.7% increase. Cross-border volume growth is expected to have aided the metric.
The factors stated above are expected to have positioned the company for year-over-year growth in the fiscal first quarter and an earnings beat. However, rising expenses and client incentives (a contra-revenue item) are likely to have partially offset the positive impact of higher volumes.
We expect adjusted total operating expenses for the quarter under review to increase more than 7% year over year due to increased Personnel, Professional Fees and Marketing expenses. Our estimate for client incentives suggests that the metric will be close to $3.3 billion in the fiscal first quarter.
Other Stocks That Warrant a Look
Here are some other companies from the broader Business Services space that you may also want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat this time around:
The Zacks Consensus Estimate for PagSeguro’s bottom line for the to-be-reported quarter is pegged at 29 cents per share, which suggests a 20.8% year-over-year jump. The estimate improved by a penny over the past week. PAGS beat earnings estimates in all the past four quarters, with an average surprise of 9%.
Fidelity National Information Services, Inc. (FIS - Free Report) has an Earnings ESP of +3.40% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Fidelity National’s bottom line for the to-be-reported quarter is pegged at 95 cents per share, which remained stable for the past week. Furthermore, the consensus mark for FIS’ revenues is pegged at $2.5 billion.
S&P Global Inc. (SPGI - Free Report) has an Earnings ESP of +0.85% and a Zacks Rank of 2.
The Zacks Consensus Estimate for S&P Global’s bottom line for the to-be-reported quarter is pegged at $3.14 per share, indicating 23.6% year-over-year growth. SPGI beat earnings estimates in three of the past four quarters and met once, with an average surprise of 4%.
Image: Bigstock
Is Visa (V) Poised for Q1 Earnings Beat on Transactions Growth?
Visa Inc. (V - Free Report) is set to continue its earnings beat streak in the first quarter of fiscal 2024, the results for which are expected to be released on Jan 25, after the closing bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for first-quarter fiscal 2024 earnings per share of $2.33 has remained stable over the past week. The estimate is indicative of a 6.9% increase from the year-ago reported figure. Visa beat earnings estimates in all the trailing four quarters, delivering an average surprise of 5.4%. This is depicted in the graph below.
Visa Inc. Price and EPS Surprise
Visa Inc. price-eps-surprise | Visa Inc. Quote
The Zacks Consensus Estimate for revenues is pegged at $8.5 billion, suggesting a 7.1% jump from the year-ago reported figure.
What the Quantitative Model Suggests
Our proven model predicts a likely earnings beat for Visa this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is precisely the case here.
Earnings ESP: Earnings ESP for the company is currently +0.71%. The Most Accurate Estimate is currently pegged at $2.35 per share, higher than the Zacks Consensus Estimate of $2.33. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Visa currently carries a Zacks Rank #3.
Before we get into what to expect in the to-be-reported quarter in detail, let’s see how the company performed in the last quarter.
Q4 Earnings Rewind
In the last reported quarter, the payments technology company’s adjusted earnings per share of $2.33 beat the Zacks Consensus Estimate by 4.5%, primarily on the back of increased payments, cross-border volumes and processed transactions. Steady cross-border travel growth, resilient consumer spending and higher-than-expected data processing aided the results, partially offset by increased costs and client incentives.
Now, let’s see how things have shaped up prior to the first-quarter fiscal 2024 earnings announcement.
Factors Driving Q1 Earnings
Visa's fiscal first-quarter results are expected to be driven by the heightened spending in the travel and entertainment sectors. Furthermore, the continuous adoption and popularity of digital payment methods are expected to have persisted during the quarter, serving as key contributors to Visa's overall performance. The Zacks Consensus Estimate for fiscal first-quarter total Gross Dollar Volume indicates an increase of 6.7% from the year-ago period, whereas our model predicts nearly 6% growth.
As the company draws revenues as a set percentage of total transaction value every time a customer makes payments with a debit/credit card, higher spending means more revenues in the form of transaction processing fees. The Zacks Consensus Estimate for fiscal first-quarter total processed transactions indicates 9.5% year-over-year growth, whereas our model predicts a 9.7% increase.
The consensus mark for total payment volumes indicates an 8.7% year-over-year increase, whereas our estimate suggests 8.2% growth. We expect the metric for U.S. operations alone to jump nearly 8% year over year. Similarly, our model predicts almost 15% and 17% year-over-year growth in Europe and Latin America.
The Zacks Consensus Estimate for data processing revenues indicates 11.2% growth in the fiscal first quarter from the year-ago level of $3.8 billion, while our estimate predicts a 10% increase. Similarly, the consensus mark for service revenues suggests 10.6% year-over-year growth, whereas we expect the metric to grow more than 9%.
Furthermore, the consensus estimate for international transaction revenues indicates 9.2% growth from a year ago, whereas our model predicts a 10.7% increase. Cross-border volume growth is expected to have aided the metric.
The factors stated above are expected to have positioned the company for year-over-year growth in the fiscal first quarter and an earnings beat. However, rising expenses and client incentives (a contra-revenue item) are likely to have partially offset the positive impact of higher volumes.
We expect adjusted total operating expenses for the quarter under review to increase more than 7% year over year due to increased Personnel, Professional Fees and Marketing expenses. Our estimate for client incentives suggests that the metric will be close to $3.3 billion in the fiscal first quarter.
Other Stocks That Warrant a Look
Here are some other companies from the broader Business Services space that you may also want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat this time around:
PagSeguro Digital Ltd. (PAGS - Free Report) has an Earnings ESP of +10.35% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for PagSeguro’s bottom line for the to-be-reported quarter is pegged at 29 cents per share, which suggests a 20.8% year-over-year jump. The estimate improved by a penny over the past week. PAGS beat earnings estimates in all the past four quarters, with an average surprise of 9%.
Fidelity National Information Services, Inc. (FIS - Free Report) has an Earnings ESP of +3.40% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Fidelity National’s bottom line for the to-be-reported quarter is pegged at 95 cents per share, which remained stable for the past week. Furthermore, the consensus mark for FIS’ revenues is pegged at $2.5 billion.
S&P Global Inc. (SPGI - Free Report) has an Earnings ESP of +0.85% and a Zacks Rank of 2.
The Zacks Consensus Estimate for S&P Global’s bottom line for the to-be-reported quarter is pegged at $3.14 per share, indicating 23.6% year-over-year growth. SPGI beat earnings estimates in three of the past four quarters and met once, with an average surprise of 4%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.