Visa (V) Exceeds Market Returns: Some Facts to Consider

Visa (V) ended the recent trading session at $378.40, demonstrating a +1.54% change from the preceding day's closing price. The stock's performance was ahead of the S&P 500's daily gain of 0.46%. On the other hand, the Dow registered a gain of 0.56%, and the technology-centric Nasdaq increased by 0.45%.

Shares of the global payments processor have appreciated by 0.83% over the course of the past month, underperforming the Business Services sector's gain of 1.36%, and the S&P 500's gain of 2%.

The investment community will be paying close attention to the earnings performance of Visa in its upcoming release. The company is predicted to post an EPS of $3.43, indicating a 15.1% growth compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $12.07 billion, indicating a 12.56% growth compared to the corresponding quarter of the prior year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $13.16 per share and a revenue of $45.83 billion, signifying shifts of +14.73% and +14.58%, respectively, from the last year.

Investors should also note any recent changes to analyst estimates for Visa. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.31% higher. Visa currently has a Zacks Rank of #3 (Hold).

In the context of valuation, Visa is at present trading with a Forward P/E ratio of 28.32. This signifies a premium in comparison to the average Forward P/E of 13.42 for its industry.

Investors should also note that V has a PEG ratio of 2 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Financial Transaction Services stocks are, on average, holding a PEG ratio of 0.85 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 171, putting it in the bottom 31% of all 250+ industries.

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.

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

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This article originally published on Zacks Investment Research (zacks.com).

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