Here's Why Visa (V) Fell More Than Broader Market

Visa (V) ended the recent trading session at $299.02, demonstrating a -3.06% change from the preceding day's closing price. The stock's performance was behind the S&P 500's daily loss of 1.36%. On the other hand, the Dow registered a loss of 1.64%, and the technology-centric Nasdaq decreased by 1.46%.

Coming into today, shares of the global payments processor had lost 3.46% in the past month. In that same time, the Business Services sector lost 1.11%, while the S&P 500 lost 1.76%.

The investment community will be paying close attention to the earnings performance of Visa in its upcoming release. On that day, Visa is projected to report earnings of $3.09 per share, which would represent year-over-year growth of 11.96%. Simultaneously, our latest consensus estimate expects the revenue to be $10.7 billion, showing a 11.51% escalation compared to the year-ago quarter.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $12.84 per share and a revenue of $44.5 billion, representing changes of +11.94% and +11.26%, respectively, from the prior year.

Any recent changes to analyst estimates for Visa should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical 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 past month, there's been no change in the Zacks Consensus EPS estimate. At present, Visa boasts a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Visa has a Forward P/E ratio of 24.02 right now. This denotes a premium relative to the industry average Forward P/E of 11.52.

We can additionally observe that V currently boasts a PEG ratio of 1.77. 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 0.91 based on yesterday's closing prices.

The Financial Transaction Services industry is part of the Business Services sector. At present, this industry carries a Zacks Industry Rank of 157, placing it within the bottom 36% of over 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.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

Free Report: Profiting from the 2nd Wave of AI Explosion

The next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.

Investors who bought shares like Nvidia at the right time have had a shot at huge gains.

But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.

Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.

Access AI Boom 2.0 now, absolutely free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Visa Inc. (V): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research