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Visa (V) Stock Sinks As Market Gains: What You Should Know

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Visa (V) closed the most recent trading day at $214.67, moving -0.15% from the previous trading session. This move lagged the S&P 500's daily gain of 0.08%. At the same time, the Dow lost 0.56%, and the tech-heavy Nasdaq lost 4.81%.

Heading into today, shares of the global payments processor had gained 1.32% over the past month, outpacing the Business Services sector's loss of 16.15% and the S&P 500's gain of 0.64% in that time.

Investors will be hoping for strength from Visa as it approaches its next earnings release, which is expected to be January 27, 2022. The company is expected to report EPS of $1.69, up 19.01% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.77 billion, up 19.03% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.02 per share and revenue of $28.2 billion, which would represent changes of +18.78% and +16.98%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Visa. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.31% lower. Visa is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Visa has a Forward P/E ratio of 30.57 right now. For comparison, its industry has an average Forward P/E of 17.15, which means Visa is trading at a premium to the group.

It is also worth noting that V currently has a PEG ratio of 1.89. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Financial Transaction Services stocks are, on average, holding a PEG ratio of 1.15 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 158, putting it in the bottom 39% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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