Back to top

Image: Bigstock

Why Visa (V) Outpaced the Stock Market Today

Read MoreHide Full Article

The latest trading session saw Visa (V - Free Report) ending at $288.63, denoting a +1.36% adjustment from its last day's close. The stock's change was more than the S&P 500's daily gain of 0.28%. Meanwhile, the Dow gained 0.15%, and the Nasdaq, a tech-heavy index, added 0.15%.

Shares of the global payments processor have appreciated by 6.48% over the course of the past month, underperforming the Business Services sector's gain of 6.6% and outperforming the S&P 500's gain of 2%.

The upcoming earnings release of Visa will be of great interest to investors. The company is predicted to post an EPS of $2.58, indicating a 10.73% growth compared to the equivalent quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $9.49 billion, indicating a 10.24% increase compared to the same quarter of the previous year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $9.92 per share and a revenue of $35.8 billion, representing changes of +13.11% and +9.64%, respectively, from the prior year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Visa. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. At present, Visa boasts a Zacks Rank of #3 (Hold).

Investors should also note Visa's current valuation metrics, including its Forward P/E ratio of 28.7. This expresses a premium compared to the average Forward P/E of 17.31 of its industry.

Also, we should mention that V has a PEG ratio of 2.01. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. V's industry had an average PEG ratio of 1.26 as of yesterday's close.

The Financial Transaction Services industry is part of the Business Services sector. With its current Zacks Industry Rank of 85, this industry ranks in the top 34% of all industries, numbering over 250.

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.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


See More Zacks Research for These Tickers


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


Visa Inc. (V) - free report >>

Published in