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

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Visa (V - Free Report) closed the most recent trading day at $217.96, moving +1.2% from the previous trading session. This change outpaced the S&P 500's 1.02% gain on the day. Meanwhile, the Dow gained 0.74%, and the Nasdaq, a tech-heavy index, lost 0.4%.

Coming into today, shares of the global payments processor had gained 8.51% in the past month. In that same time, the Business Services sector lost 2.81%, while the S&P 500 lost 0.91%.

Investors will be hoping for strength from Visa as it approaches its next earnings release. In that report, analysts expect Visa to post earnings of $1.69 per share. This would mark year-over-year growth of 19.01%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.77 billion, up 19% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.03 per share and revenue of $28.19 billion, which would represent changes of +18.95% and +16.93%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Visa. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.13% lower within the past month. Visa is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that Visa has a Forward P/E ratio of 30.64 right now. This represents a premium compared to its industry's average Forward P/E of 25.

Meanwhile, V's PEG ratio is currently 1.89. 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. The Financial Transaction Services was holding an average PEG ratio of 1.09 at yesterday's closing price.

The Financial Transaction Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 167, which puts it in the bottom 35% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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