In the latest trading session, Visa (V) closed at $206.40, marking a -0.12% move from the previous day. This change lagged the S&P 500’s 1.64% gain on the day. Elsewhere, the Dow gained 0.88%, while the tech-heavy Nasdaq added 2.56%.
Prior to today’s trading, shares of the global payments processor had gained 2.53% over the past month. This has outpaced the Business Services sector’s loss of 2.61% and the S&P 500’s gain of 2.44% in that time.
V will be looking to display strength as it nears its next earnings release, which is expected to be October 28, 2020. The company is expected to report EPS of $1.10, down 25.17% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $5.03 billion, down 17.96% from the year-ago period.
Investors might also notice recent changes to analyst estimates for V. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
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 0.17% higher. V currently has a Zacks Rank of #2 (Buy).
Valuation is also important, so investors should note that V has a Forward P/E ratio of 35.5 right now. This represents a premium compared to its industry’s average Forward P/E of 27.26.
Investors should also note that V has a PEG ratio of 2.71 right now. 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. Financial Transaction Services stocks are, on average, holding a PEG ratio of 1.54 based on yesterday’s closing prices.
The Financial Transaction Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 117, which puts it in the top 47% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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.