Visa V Falls More Steeply Than Broader Market: What Investors Need to Know May 29, 2024

As the months drag on and the Federal Reserve keeps interest rates high, investors see less potential for a quick turnaround. Inflation and interest rates could stay high for longer than thought, and that is likely to eventually affect spending patterns. The high interest rates, in fact, are meant to limit spending and slow the economy, and the continued spending growth is damping the Fed’s plans to end high inflation and cut rates.

Upcoming earnings

In the meantime, our current consensus estimate forecasts the revenue to be $8.91 billion, indicating a 9.65% growth compared to the corresponding quarter of the prior year. The findings could upend the financial services industry that, like other business sectors, is racing to adopt generative AI technologies. Nvidia also announced it will conduct a 10-for-1 stock split June 7, which would trim its share price from about $950 to $95 while maintaining the company’s total valuation, enabling investors and employees to more affordably purchase whole shares. The standard argument for Visa’s suitability as a stock candidate is that its performance matches the economy. It has performed impressively during the past few years despite inflation, and many strong retail indicators are helping it along. However, the market often reflects overall investor sentiment, and that can override a company’s real performance.

Migrant Resource Centre

Visa’s (V) stock has risen 11% over the past 12 months as a result of strong growth in volumes and the addition of new clients in 2Q17. The company is gaining ground through more partnerships and co-branded cards, but the market is expected to be more competitive on the pricing front as companies cut costs. Visa is a business that helps to facilitate the smooth functioning of commerce.

NYSE: VVisa Inc Stock

The critical distinction between the visa trading and typical irregular migration is that under visa trading, the migrant worker enters the destination country with appropriate paperwork with the correct visa, but then subsequently enters the black market. Visa has 100 million merchant locations and more than 4 billion outstanding cards all plugged into its payments platform. Because there are so many customers using Visa cards, merchants have no choice but to accept them. And because paying with Visa is so ubiquitous across the world, it’s hard to find someone who doesn’t have one of these cards in his or her wallet.

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There’s no reason to believe this secular trend away from cash is abating anytime soon. So, 10 years from now, I’m sure Visa will be generating a lot more revenue and net income. Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To capitalize on this, we’ve crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

Using cards as a method of payment is so ingrained in our society that Visa’s competitive standing is almost impossible to disrupt. Along with its duopoly position with Mastercard, Visa has a mutually beneficial relationship with numerous banks that issue its branded credit cards, as well as acquirers that bring on new merchants to the network. It is a leader in financial technology, or fintech, and it has launched better, faster payments and money-moving methods. Its two innovation-focused categories, new flows and value-added services, are growing faster than the consumer payments category. New flows, which comprise alternative payment methods like Visa Direct, increased 14% year over year in the 2024 fiscal second quarter (ended March 31), while total revenue was up 10%. Visa Incorporated operates VisaNet, a transaction processing network that enables authorization, clearing, and settlement of payment transactions.

Visa makes a lot of acquisitions to bolster this arm of its business and create a formidable financial services giant. At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.08% per year. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month.

  1. These metrics shed light on the liquidity and investor interest in Visa’s options at specified strike prices.
  2. For the fiscal year 2022, Visa reported earnings of US$14.96 billion, with an annual revenue of US$29.31 billion, an increase of 21.6% over the previous fiscal cycle.
  3. Rather, the migrant worker is “released” into the black market to earn a living in exchange for financially compensating the sponsor.
  4. Is Visa stock, a proven winner for anyone’s portfolio, a buy right now?
  5. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.

Because it takes a tiny cut of every transaction that occurs on its network — an assessment fee of less than 0.15% — if prices for things go up and consumers are required to spend more, Visa’s revenue gets a boost. Finally, the study found that applying GPT-4’s financial acumen to trading strategies produced more profitable trading, with higher share ratios and alpha that ultimately beat the stock market. Over the past month, 2 industry analysts have shared their insights on this stock, proposing an average target price of $298.5. Visa has a set of rules that govern the participation of financial institutions in its payment system.

More specifically, it is alleged that MasterCard’s and Visa’s network rules prohibit ATM operators from offering lower prices for transactions over PIN-debit networks that are not affiliated with Visa or MasterCard. The suit says that this price-fixing artificially raises the price that consumers pay using ATMs, limits the revenue that ATM-operators earn, and violates the Sherman Act’s prohibition against unreasonable restraints of trade. The company’s impressive historical success has been supported by beaxy exchange review the steady proliferation of cashless transactions, particularly with the rise in popularity of credit cards and other digital forms of payment. Despite the convenience and safety of using non-cash payments, even in a developed economy like the U.S., 58% of Americans still use cash for some or all of their weekly purchases. The opportunity for Visa is even larger, unsurprisingly, in emerging markets. It’s also hard to understate Visa’s importance in the daily lives of both merchants and individuals.

Considering the high growth and low exchange volatility expected in the upcoming quarters, the stock could offer attractive returns to investors in the long term. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on, top-rated podcasts, and non-profit The Motley Fool Foundation. In 2011, MasterCard and Visa were sued in a class action by ATM operators claiming the credit card networks’ rules effectively fix ATM access fees.[88] The suit claimed that this is a restraint on trade in violation of US federal law. The lawsuit was filed by the National ATM Council and independent operators of automated teller machines.

In irregular migration, the entry is illegal because it was done without the appropriate visa or travel document or done for a non-work-related purpose. The study utilized “chain-of-thought” prompts that directed GPT-4 to identify trends in financial statements and calculate different financial ratios. From there, the large language model analyzed the information and predicted future earnings results.

But it’s also worth mentioning that Visa is way more expensive than the overall S&P 500. And the stock is trading at a sizable premium to where it was at just eight months ago. Investors know this is a quality business, so its shares rarely go on sale at a discount.

Rather, the migrant worker is “released” into the black market to earn a living in exchange for financially compensating the sponsor. Its full-year operating cash flows in fiscal 2016 are expected to be $7 billion. Its operating margins are expected to be in the mid-60s in fiscal 2016. Visa expects its revenue growth, excluding currency impact, to be in the low double digits. Visa’s fiscal second quarter essentially showed the company holding steady.

For the fiscal year 2022, Visa reported earnings of US$14.96 billion, with an annual revenue of US$29.31 billion, an increase of 21.6% over the previous fiscal cycle. As of 2022, the company ranked 147th on the Fortune 500 list of the largest United States corporations by revenue.[65] Visa’s shares traded at over $143 per share, and its market capitalization was valued at over US$280.2 billion in September 2018. Market participants will be closely following the financial results of Visa in its upcoming release. On that day, Visa is projected to report earnings of $2.41 per share, which would represent year-over-year growth of 11.57%.

The company has taken on a debt of about $16 billion to fund its acquisition of Visa Europe. The company’s stand-alone valuation gap has increased marginally due to the relatively low performances of its competitors. We’d like to share more about how we work and what drives our day-to-day business.

Our community is about connecting people through open and thoughtful conversations. We want our readers to share their views and exchange ideas and facts in a safe space. This was Nvidia’s most profitable and highest sales quarter ever, topping the quarter ending this January’s record $12.3 billion net income and $22.1 billion revenue. After Visa’s acquisition of TrialPay on February 27, 2015,[141] Visa created the Visa Commerce Network. Visa Commerce Network provides businesses the ability to provide rewards, through the use of loyalty programs.

As travel picks up again, following a period of pressured demand from the pandemic, Visa is benefiting. Cross-border payment volume was up 24% year over year, faster growth than overall payments volume. “On the cross-border front, the travel recovery trend has been steady and generally in line with our expectations so far in fiscal year ’23,” said CFO Vasant Prabhu on the latest earnings call. Management also mentioned travel into Asia being stronger than pre-pandemic levels. Visa trading refers to a situation where a migrant is sponsored for a specific work or position.

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