Visa(US:V) ZACKS·2024-10-24 17:35Core Viewpoint - Visa Inc. is expected to report strong fourth-quarter fiscal 2024 results, with earnings projected at $2.58 per share and revenues at $9.49 billion, indicating year-over-year growth of 10.7% and 10.2% respectively [1][3] Financial Performance - The Zacks Consensus Estimate for Visa's revenues for the current year is $35.78 billion, reflecting a 9.6% year-over-year increase, while the EPS estimate is $9.92, indicating a 13.1% rise [1] - Visa has a history of exceeding earnings estimates, having beaten projections in the last four quarters by an average of 2.9% [1] Earnings Predictions - Visa has an Earnings ESP of +0.23% and a Zacks Rank of 3, suggesting a likely earnings beat for the upcoming quarter [2] - The total Gross Dollar Volume is expected to increase by 6.2% year-over-year, contributing positively to revenues [3] Transaction Metrics - The Zacks Consensus Estimate for total processed transactions indicates a 10.6% year-over-year growth, while the model predicts a 9.8% increase [3] - Total payment volumes are projected to grow by 7% year-over-year, with U.S. operations expected to rise over 5% [4] Revenue Breakdown - Data processing revenues are estimated to grow by 11% year-over-year, while service revenues are expected to increase by nearly 7% [4] - International transaction revenues are projected to grow by over 10% year-over-year, supported by increasing cross-border volumes [4] Expense Outlook - Adjusted total operating expenses are expected to rise by 8.4% year-over-year due to increased costs in various areas [5] - Client incentives are estimated to be around $3.8 billion for the fiscal fourth quarter [5] Stock Performance - Visa's stock has gained 9% year-to-date, underperforming the industry average growth of 14% [6] - Compared to peers, Mastercard and American Express have shown higher gains of 20.5% and 44.8% respectively [6] Valuation Analysis - Visa is currently trading at 25.36X forward 12 months earnings, above the industry average of 23.76X [9] - In comparison, American Express offers a better value at 18.63X, while Mastercard is less attractively valued at 31.74X [10] Growth Prospects - Visa is benefiting from resilient consumer spending and the rise of e-commerce, positioning itself for long-term growth [10] - The launch of the Visa Tokenized Asset Platform (VTAP) enhances transaction security and interoperability [10] Challenges - Visa faces regulatory pressures, ongoing lawsuits, and potential impacts from the Credit Card Competition Act of 2023 [11] - An antitrust lawsuit filed by the Department of Justice could affect profit margins, although the financial impact may be gradual due to prolonged legal proceedings [11]