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Visa's (V) May Card-Not-Present & Cross-Border Volumes Grow

Visa Inc. V reported somewhat mixed results for May, showing both booming e-commerce businesses and lower-than-expected card payments volume growth in the domestic market. The financial transaction juggernaut witnessed only 5% year-over-year growth in U.S. payments volume last month.

The metric witnessed a 5% increase in the quarter-to-date period. For the fiscal third quarter, the Zacks Consensus Estimate for U.S. payments volume growth is pegged at 6.7%. Hence, V has a considerable stretch left to cover in the third month. Its top line depends heavily on payments volume.

The Zacks Consensus Estimate for Visa’s fiscal 2023 revenues is pegged at $32.5 billion, indicating 10.9% year-over-year growth. Similarly, the consensus mark for earnings per share is pegged at $8.58, suggesting 14.4% growth from a year ago.

Per the regulatory filing by Visa, its processed transaction growth numbers have declined considerably from the start of the year. While card not present volume increased 7% year over year in May, card present volume only climbed 3%. This can signify that e-commerce businesses are still prospering, at least at a better degree than brick-and-mortar businesses.

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Its global processed transactions jumped 9% in the month from the prior-year period. The volume was 153% of the 2019 level. Credit payments volume in the United States increased 5% in May while debit payments rose 6%. These growth percentages are sequentially flat from April.

Total cross-border volume increased 17% year over year in May, following a 19% jump in April. Excluding intra-Europe transactions, cross-border volume rose 21% year over year in May and 26% in April. The ongoing recovery in travel is expected to keep the volumes up.

Price Performance

Shares of the company have gained 5.3% in the past year against the industry’s 3.8% decline.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Zacks Rank & Key Picks

Visa currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader business services space are Remitly Global, Inc. RELY, Paysafe Limited PSFE and PagSeguro Digital Ltd. PAGS, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Remitly Global’s 2023 earnings indicates a 7.4% improvement from the prior-year reported number. Also, the consensus mark for revenues for the year indicates 36.8% growth.

The Zacks Consensus Estimate for Paysafe’s 2023 earnings is pegged at $2.20 per share, which witnessed one upward estimate revision over the past month against none in the opposite direction. PSFE’s earnings beat estimates in three of the last four quarters and missed once, the average surprise being 190.5%.

The Zacks Consensus Estimate for PagSeguro Digital’s 2023 bottom line indicates 4.4% year-over-year growth. PAGS’s earnings beat estimates in all the last four quarters, the average surprise being 36.7%.

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Visa Inc. (V) : Free Stock Analysis Report

Remitly Global, Inc. (RELY) : Free Stock Analysis Report

PagSeguro Digital Ltd. (PAGS) : Free Stock Analysis Report

Paysafe Limited (PSFE) : Free Stock Analysis Report

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Zacks Investment Research