We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Visa Stock Still a Safe Bet for Investors Amid Likely DOJ Lawsuit?
Read MoreHide Full Article
The U.S. Department of Justice (DOJ) is likely to file a lawsuit against Visa Inc. (V - Free Report) , accusing the latter of monopolizing the U.S. debit card market, per Bloomberg. The DOJ has claimed that Visa engaged in anti-competitive practices, such as making exclusive deals that prevent other payment processors from growing and blocking technology companies from entering the market. By doing so, the company allegedly solidified its dominance in the market and stifled competition.
The DOJ's goal is to challenge Visa's practices in court, which could lead to restrictions or penalties on the latter, opening the market for more competition. This lawsuit is part of a broader government effort to crack down on monopoly behaviors in different industries.
The investigation into Visa by the DOJ began after its failed attempt at a $5.3 billion acquisition of payments company Plaid in 2021. The DOJ argued that Visa’s acquisition plan of Plaid was an attempt to eliminate a potential competitor that could have challenged its dominance in the online debit market.
Is Visa Stock Still a Safe Bet?
Investors have several factors to weigh while considering whether Visa is still a safe investment option amid the DOJ antitrust lawsuit. The lawsuit, like multiple others, could lead to financial penalties and/or put restrictions on the company’s business practices. This can create uncertainty and is likely to result in short-term volatility in the stock.
However, the payment giant has dealt with legal challenges in the past and has continued to perform well. Its massive global reach and strong financials enable it to weather regulatory storms. Also, due to its dominant market share, even if market competition intensifies following the lawsuit, its broad customer base and established infrastructure can provide a solid foundation for long-term stability.
Visa is continually expanding in areas like digital payments and cybersecurity, which are experiencing significant growth. Even if the lawsuit impacts its debit card dominance, its global diversification efforts could support long-term growth. The company currently carries a Zacks Rank #2 (Buy).
Price Performance of Visa Stock
Shares of Visa have gained 23.7% in the past year compared with the industry’s 22.2% growth.
The Zacks Consensus Estimate for Fidelity National’s current-year earnings indicates a 50.7% year-over-year increase. FIS beat earnings estimates in two of the trailing four quarters and missed twice. The consensus estimate for current-year revenues is pegged at $10.2 billion.
The consensus estimate for Paysign’s current-year earnings indicates 75% year-over-year growth. The consensus estimate for PAYS’ current-year revenues is pegged at $58 million, implying 22.6% year-over-year growth.
The Zacks Consensus Estimate for Remitly Global’s current-year earnings indicates a 53.9% year-over-year improvement. RELY beat earnings estimates in two of the trailing four quarters and missed twice, with the average surprise being 8%. The consensus estimate for current-year revenues implies 31.8% year-over-year growth.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Visa Stock Still a Safe Bet for Investors Amid Likely DOJ Lawsuit?
The U.S. Department of Justice (DOJ) is likely to file a lawsuit against Visa Inc. (V - Free Report) , accusing the latter of monopolizing the U.S. debit card market, per Bloomberg. The DOJ has claimed that Visa engaged in anti-competitive practices, such as making exclusive deals that prevent other payment processors from growing and blocking technology companies from entering the market. By doing so, the company allegedly solidified its dominance in the market and stifled competition.
The DOJ's goal is to challenge Visa's practices in court, which could lead to restrictions or penalties on the latter, opening the market for more competition. This lawsuit is part of a broader government effort to crack down on monopoly behaviors in different industries.
The investigation into Visa by the DOJ began after its failed attempt at a $5.3 billion acquisition of payments company Plaid in 2021. The DOJ argued that Visa’s acquisition plan of Plaid was an attempt to eliminate a potential competitor that could have challenged its dominance in the online debit market.
Is Visa Stock Still a Safe Bet?
Investors have several factors to weigh while considering whether Visa is still a safe investment option amid the DOJ antitrust lawsuit. The lawsuit, like multiple others, could lead to financial penalties and/or put restrictions on the company’s business practices. This can create uncertainty and is likely to result in short-term volatility in the stock.
However, the payment giant has dealt with legal challenges in the past and has continued to perform well. Its massive global reach and strong financials enable it to weather regulatory storms. Also, due to its dominant market share, even if market competition intensifies following the lawsuit, its broad customer base and established infrastructure can provide a solid foundation for long-term stability.
Visa is continually expanding in areas like digital payments and cybersecurity, which are experiencing significant growth. Even if the lawsuit impacts its debit card dominance, its global diversification efforts could support long-term growth. The company currently carries a Zacks Rank #2 (Buy).
Price Performance of Visa Stock
Shares of Visa have gained 23.7% in the past year compared with the industry’s 22.2% growth.
Image Source: Zacks Investment Research
Other Key Picks
Investors can also look at other top-ranked stocks from the broader Business Services space, like Fidelity National Information Services, Inc. (FIS - Free Report) , Paysign, Inc. (PAYS - Free Report) and Remitly Global, Inc. (RELY - Free Report) . While Fidelity National currently sports a Zacks Rank #1 (Strong Buy), Paysign and Remitly Global each carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Fidelity National’s current-year earnings indicates a 50.7% year-over-year increase. FIS beat earnings estimates in two of the trailing four quarters and missed twice. The consensus estimate for current-year revenues is pegged at $10.2 billion.
The consensus estimate for Paysign’s current-year earnings indicates 75% year-over-year growth. The consensus estimate for PAYS’ current-year revenues is pegged at $58 million, implying 22.6% year-over-year growth.
The Zacks Consensus Estimate for Remitly Global’s current-year earnings indicates a 53.9% year-over-year improvement. RELY beat earnings estimates in two of the trailing four quarters and missed twice, with the average surprise being 8%. The consensus estimate for current-year revenues implies 31.8% year-over-year growth.