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Visa (V) Stock Slides as Market Rises: Facts to Know Before You Trade

In the latest market close, Visa (V) reached $275.04, with a -1.3% movement compared to the previous day. The stock fell short of the S&P 500, which registered a gain of 0.26% for the day. On the other hand, the Dow registered a gain of 0.18%, and the technology-centric Nasdaq increased by 0.35%.

The global payments processor's shares have seen a decrease of 0.74% over the last month, not keeping up with the Business Services sector's loss of 0.47% and the S&P 500's gain of 3.25%.

The upcoming earnings release of Visa will be of great interest to investors. On that day, Visa is projected to report earnings of $2.41 per share, which would represent year-over-year growth of 11.57%. Simultaneously, our latest consensus estimate expects the revenue to be $8.91 billion, showing a 9.65% escalation compared to the year-ago quarter.

For the full year, the Zacks Consensus Estimates are projecting earnings of $9.94 per share and revenue of $35.86 billion, which would represent changes of +13.34% and +9.82%, respectively, from the prior year.

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Any recent changes to analyst estimates for Visa should also be noted by investors. These revisions help to show the ever-changing nature of 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 exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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 last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Currently, Visa is carrying a Zacks Rank of #3 (Hold).

In terms of valuation, Visa is currently trading at a Forward P/E ratio of 28.04. Its industry sports an average Forward P/E of 14.6, so one might conclude that Visa is trading at a premium comparatively.

It is also worth noting that V currently has a PEG ratio of 1.91. 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. V's industry had an average PEG ratio of 0.96 as of yesterday's close.

The Financial Transaction Services industry is part of the Business Services sector. With its current Zacks Industry Rank of 43, this industry ranks in the top 18% of all industries, numbering over 250.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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Visa Inc. (V) : Free Stock Analysis Report

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Zacks Investment Research