Thinking of Buying Visa Before Q1 Earnings? You Might Want to Wait

Core Viewpoint - Visa Inc. is expected to report its first-quarter fiscal 2026 results on January 29, 2026, with earnings estimated at $3.14 per share and revenues at $10.68 billion, indicating year-over-year growth in both metrics [1][2]. Financial Estimates - The earnings estimate for the fiscal first quarter has remained stable over the past 60 days, projecting a 14.2% increase year-over-year [2]. - The Zacks Consensus Estimate for fiscal 2026 revenues is $44.44 billion, reflecting an 11.1% year-over-year rise, while the EPS consensus is $12.81, suggesting an 11.7% increase [3]. Earnings Performance - Visa has a strong history of exceeding earnings estimates, having beaten projections in the last four quarters by an average of 2.7% [3]. Earnings Prediction Model - The current model indicates a negative Earnings ESP of -0.23% and a Zacks Rank of 3 (Hold), suggesting uncertainty regarding an earnings beat this quarter [4]. Growth Factors - Processed transactions are expected to grow by 9.5%, and payment volumes are projected to increase by 8.6% year-over-year [7]. - The total Gross Dollar Volume is estimated to rise by 6.4%, with digital payment adoption contributing positively to results [8]. Revenue Breakdown - Data processing revenues are expected to grow by 14.6% year-over-year, while service revenues are projected to increase by 11.2% [11]. - International transaction revenues are estimated to grow by 11.8%, supported by rising cross-border volumes [12]. Expense Outlook - Adjusted total operating expenses are anticipated to rise by 12% year-over-year, influenced by increased personnel and processing costs [13]. Stock Performance - Visa's stock has declined by 6.1% over the past three months, underperforming the S&P 500's 2.4% rise and the industry's 9.4% decline [14]. Valuation Comparison - Visa is currently trading at 24.46X forward 12-month earnings, above the industry average of 19.62X, indicating a somewhat stretched valuation [17]. Strategic Positioning - Visa is recognized as a high-quality compounder with a resilient asset-light model and long-term growth prospects supported by structural tailwinds [20]. - However, near-term risks include rising expenses, regulatory scrutiny, and competitive threats, which may limit immediate upside potential [22].