Visa Swiping Toward a Beat: Should You Buy Before Q3 Earnings?

Core Viewpoint - Visa Inc. is expected to report strong fiscal Q3 2025 results, with earnings projected at $2.86 per share and revenues at $9.87 billion, reflecting year-over-year growth of 18.2% and 10.9% respectively [1][6]. Financial Estimates - The earnings estimate for fiscal Q3 has been revised upward by 2 cents over the past 60 days, indicating a positive trend [2]. - For fiscal 2025, the Zacks Consensus Estimate for Visa's revenues is $39.63 billion, suggesting a year-over-year increase of 10.3%, while the EPS is projected at $11.37, indicating a 13.1% rise [3]. Earnings Predictions - Visa has a positive Earnings ESP of +0.39% and a Zacks Rank of 2 (Buy), which increases the likelihood of an earnings beat [4]. - The company is expected to benefit from strong growth in payment volumes, processed transactions, and cross-border activity, despite rising expenses and client incentives exceeding $4 billion [6][12]. Growth Metrics - The Zacks Consensus Estimate suggests a 3.6% increase in total Gross Dollar Volume year-over-year, while the model predicts a 4.6% growth [7]. - Total processed transactions are expected to grow by 8.7% year-over-year, with the model predicting a 9.6% increase [8]. - Payment volumes are projected to increase by 7.7% year-over-year, with U.S. operations expected to rise by 6.3% and Latin America and CEMEA by 15% each [9]. Revenue Breakdown - Data processing revenues are estimated to grow by 12.5% year-over-year, while service revenues are expected to increase by 8.2% [10]. - International transaction revenues are projected to grow by 12.8% year-over-year, supported by continuous growth in cross-border volumes [11]. Expense Outlook - Adjusted total operating expenses are expected to increase by more than 10% year-over-year due to higher personnel, marketing, and processing expenses [13]. Stock Performance - Visa's stock has gained 11.4% year-to-date, outperforming the industry and S&P 500, which rose by 3.7% and 6.8% respectively [14]. - The company's valuation is currently at 28.08X forward 12-month earnings, above its five-year median of 26.92X and the industry's average of 22.02X [16]. Strategic Positioning - Visa is well-positioned for long-term growth in emerging markets and digital payment trends, supported by resilient consumer spending and robust travel demand [18]. - The company is focusing on AI-powered commerce and stablecoin settlement to enhance cross-border efficiency and security, positioning itself as a leader in digital finance [21].