Visa (V) Outpaces Stock Market Gains: What You Should Know
In the latest trading session, Visa (V) closed at $234.32, marking a +1.7% move from the previous day. The stock outpaced the S&P 500's daily gain of 1.4%.
Prior to today's trading, shares of the global payments processor had gained 1.61% over the past month. This has lagged the Business Services sector's gain of 2.8% and outpaced the S&P 500's gain of 1.07% in that time.
V will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.32, up 24.53% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.79 billion, up 19.69% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $5.59 per share and revenue of $23.43 billion, which would represent changes of +10.91% and +7.24%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for V. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.22% higher. V is holding a Zacks Rank of #3 (Hold) right now.
Looking at its valuation, V is holding a Forward P/E ratio of 41.25. Its industry sports an average Forward P/E of 23.59, so we one might conclude that V is trading at a premium comparatively.
It is also worth noting that V currently has a PEG ratio of 2.2. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Financial Transaction Services industry currently had an average PEG ratio of 1.28 as of yesterday's close.
The Financial Transaction Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 181, putting it in the bottom 29% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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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