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Here's Why You Should Retain Visa (V) Stock in Your Portfolio
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Visa Inc. (V - Free Report) is well-poised to grow on the back of higher payments, cross-border volumes and processed transactions. The steady cross-border travel and data processing growth will continue to aid its performance.
Headquartered in San Francisco, Visa is a global payments technology mammoth. It has a market cap of $567.7 billion. In the year-to-date period, shares of the company have gained 6.7% compared with the industry’s 9.2% rise. Courtesy of solid prospects, this Zacks Rank #3 (Hold) stock is worth retaining at the moment.
Let’s delve deeper.
The Zacks Consensus Estimate for V’s current-year earnings is pegged at $9.89 per share, which indicates 12.8% year-over-year growth. The estimate remained stable over the past week. Visa beat on earnings in all the last four quarters, the average surprise being 4.1%.
The consensus mark for current-year revenues stands at $35.7 billion, indicating 9.3% growth from a year ago. Our estimates for service revenues and data processing revenues indicate a 9.7% and 11.3% increase from a year ago, respectively, which will likely support its top-line growth. V expects net revenues to grow in low double digits on an adjusted constant-dollar basis in fiscal 2024.
We expect fiscal 2024 processed transactions to rise nearly 9% year over year. The company’s growing network is expected to boost volumes. We expect total payment volume to rise nearly 9% year over year. It strikes numerous partnerships to boost the usage of its network and technology.
Its investments in technology are further boosting its already leading position in the payments market. This helps the company to minimize the impact of fraud and protect consumer and merchant information. This is of utmost importance as digital payment methods are rapidly gaining traction. Visa recently unveiled three AI-powered risk and fraud prevention solutions in March 2024.
With the growing digitalization of economies, Visa’s technological expertise allows it to forge partnerships with countries and governments. These partnerships will position the company for long-term growth. Its ability to innovate and create financial products tailored to clients’ and customers’ needs is commendable.
Visa maintains a robust financial position, characterized by a significant cash and investment position along with a healthy free cash flow. This financial strength supports the company's strategic acquisitions and capital expenditures, driving long-term growth. Furthermore, leveraging its strong cash position, V is dedicated to enhancing shareholders’ value. V completed the acquisition of Pismo in January 2024, which is expected to enhance its core banking and issuer processing capabilities. V also extended its partnership with Western Union for seven years. This is expected to enhance cross-border money transfers and boost transaction volumes.
The company has consistently increased its dividend every year since 2009, with the latest being a 16% hike in October 2023. Additionally, it introduced a new repurchase program of $25 billion in the same month. In the last reported quarter, it rewarded $4.4 billion to shareholders via share buybacks and dividends.
Risks
Despite the upside potential, there are a few factors that investors should keep an eye on.
Visa faces headwinds from higher client incentives and escalating expenses. In fiscal 2024, we anticipate client incentives to rise by more than 15% year over year. Additionally, our estimate for adjusted operating expenses in fiscal 2024 indicates an 8.8% jump from a year ago. Nevertheless, we believe that a systematic and strategic plan of action will drive Visa’s long-term growth.
The Zacks Consensus Estimate for MoneyLion’s current-year bottom line indicates a 98.7% year-over-year improvement. The consensus estimate for ML’s current-year top line is pegged at $518.9 million, suggesting 22.6% year-over-year growth.
The Zacks Consensus Estimate for Flywire’s current-year earnings is pegged at 5 cents per share, which indicates a 171.4% year-over-year improvement. FLYW beat earnings estimates in two of the past four quarters, met once and missed on the other occasion, with an average surprise of 33.1%. The consensus estimate for current-year revenues suggests 30.1% year-over-year growth.
The Zacks Consensus Estimate for Cantaloupe’s current-year earnings is pegged at 17 cents per share, which indicates significant growth from breakeven earnings in the year-ago period. CTLP beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 61.7%. The consensus mark for current-year revenues suggests a 13.2% year-over-year increase.
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Here's Why You Should Retain Visa (V) Stock in Your Portfolio
Visa Inc. (V - Free Report) is well-poised to grow on the back of higher payments, cross-border volumes and processed transactions. The steady cross-border travel and data processing growth will continue to aid its performance.
Headquartered in San Francisco, Visa is a global payments technology mammoth. It has a market cap of $567.7 billion. In the year-to-date period, shares of the company have gained 6.7% compared with the industry’s 9.2% rise. Courtesy of solid prospects, this Zacks Rank #3 (Hold) stock is worth retaining at the moment.
Let’s delve deeper.
The Zacks Consensus Estimate for V’s current-year earnings is pegged at $9.89 per share, which indicates 12.8% year-over-year growth. The estimate remained stable over the past week. Visa beat on earnings in all the last four quarters, the average surprise being 4.1%.
Visa Inc. Price and EPS Surprise
Visa Inc. price-eps-surprise | Visa Inc. Quote
The consensus mark for current-year revenues stands at $35.7 billion, indicating 9.3% growth from a year ago. Our estimates for service revenues and data processing revenues indicate a 9.7% and 11.3% increase from a year ago, respectively, which will likely support its top-line growth. V expects net revenues to grow in low double digits on an adjusted constant-dollar basis in fiscal 2024.
We expect fiscal 2024 processed transactions to rise nearly 9% year over year. The company’s growing network is expected to boost volumes. We expect total payment volume to rise nearly 9% year over year. It strikes numerous partnerships to boost the usage of its network and technology.
Its investments in technology are further boosting its already leading position in the payments market. This helps the company to minimize the impact of fraud and protect consumer and merchant information. This is of utmost importance as digital payment methods are rapidly gaining traction. Visa recently unveiled three AI-powered risk and fraud prevention solutions in March 2024.
With the growing digitalization of economies, Visa’s technological expertise allows it to forge partnerships with countries and governments. These partnerships will position the company for long-term growth. Its ability to innovate and create financial products tailored to clients’ and customers’ needs is commendable.
Visa maintains a robust financial position, characterized by a significant cash and investment position along with a healthy free cash flow. This financial strength supports the company's strategic acquisitions and capital expenditures, driving long-term growth. Furthermore, leveraging its strong cash position, V is dedicated to enhancing shareholders’ value. V completed the acquisition of Pismo in January 2024, which is expected to enhance its core banking and issuer processing capabilities. V also extended its partnership with Western Union for seven years. This is expected to enhance cross-border money transfers and boost transaction volumes.
The company has consistently increased its dividend every year since 2009, with the latest being a 16% hike in October 2023. Additionally, it introduced a new repurchase program of $25 billion in the same month. In the last reported quarter, it rewarded $4.4 billion to shareholders via share buybacks and dividends.
Risks
Despite the upside potential, there are a few factors that investors should keep an eye on.
Visa faces headwinds from higher client incentives and escalating expenses. In fiscal 2024, we anticipate client incentives to rise by more than 15% year over year. Additionally, our estimate for adjusted operating expenses in fiscal 2024 indicates an 8.8% jump from a year ago. Nevertheless, we believe that a systematic and strategic plan of action will drive Visa’s long-term growth.
Key Picks
Some better-ranked stocks in the broader Business Services space are MoneyLion Inc. (ML - Free Report) , Flywire Corporation (FLYW - Free Report) and Cantaloupe, Inc. (CTLP - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for MoneyLion’s current-year bottom line indicates a 98.7% year-over-year improvement. The consensus estimate for ML’s current-year top line is pegged at $518.9 million, suggesting 22.6% year-over-year growth.
The Zacks Consensus Estimate for Flywire’s current-year earnings is pegged at 5 cents per share, which indicates a 171.4% year-over-year improvement. FLYW beat earnings estimates in two of the past four quarters, met once and missed on the other occasion, with an average surprise of 33.1%. The consensus estimate for current-year revenues suggests 30.1% year-over-year growth.
The Zacks Consensus Estimate for Cantaloupe’s current-year earnings is pegged at 17 cents per share, which indicates significant growth from breakeven earnings in the year-ago period. CTLP beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 61.7%. The consensus mark for current-year revenues suggests a 13.2% year-over-year increase.