The latest trading session saw Visa (V – Free Report) ending at $344.95, denoting a +0.31% adjustment from its last day’s close. The stock outperformed the S&P 500, which registered a daily gain of 0.16%. On the other hand, the Dow registered a gain of 0.01%, and the technology-centric Nasdaq increased by 0.46%.
The the stock of global payments processor has fallen by 1.71% in the past month, leading the Business Services sector’s loss of 3.54% and the S&P 500’s loss of 3.59%.
Investors will be eagerly watching for the performance of Visa in its upcoming earnings disclosure. On that day, Visa is projected to report earnings of $2.68 per share, which would represent year-over-year growth of 6.77%. In the meantime, our current consensus estimate forecasts the revenue to be $9.56 billion, indicating an 8.91% growth compared to the corresponding quarter of the prior year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $11.31 per share and revenue of $39.58 billion. These totals would mark changes of +12.54% and +10.17%, respectively, from last year.
Investors should also pay attention to any latest changes in analyst estimates for Visa. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Within the past 30 days, our consensus EPS projection has moved 0.08% higher. Visa is currently sporting a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Visa has a Forward P/E ratio of 30.42 right now. This represents a premium compared to its industry’s average Forward P/E of 15.36.
Also, we should mention that V has a PEG ratio of 2.35. 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 1.44 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 137, putting it in the bottom 46% of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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