Visa Inc. (NYSE: V) has confirmed that it will release its earnings on Tuesday, October 26, 20221, after market close.
What to look for
Visa has performed well this year, with several acquisition and partnership opportunities paving the path for long-term growth, driving Visa revenues. In addition, the payments shift to digital mode has been a boon for Vis and the COVID-19 vaccines, and gradual consumer confidence revival will boost spending. As a result, this will lead to business expansion in turn. However, the impacts of high operating expenses will continue stressing operating margins, and that combined with client incentives will have an impact on the top line.
Earnings: Stockearning’s Estimated EPS for Q3 2021 will be around $1.53 per share marking a 36.61% YoY growth. Historical EPS performance shows that the company has topped analysts' estimates in 11 (91%) of the last 12 quarters. In the previous quarter, EPS was $1.49, topping estimates to $1.33 per share.
Revenue: In fiscal Q3 2021, the company reported net revenues of $6.1 billion, representing a 27% YoY increase. The net revenue increase could have reached 39% had service revenues been recognized on the quarter’s payment volume. For the current quarter under review, the company expects revenue of $6.48 billion, representing a YoY growth of 27.07%.
Stock movement: Visa share price is DOWN 11.3% since the last earnings release. Over the past 47% quarters, Visa shares have been DOWN on 25 occasions. So, the historical price reaction suggests a 53% probability of the stock going DOWN after the Q3 earnings release. According to the Stockearning algorithm, the predicted stock move on the first day is 2%, while the predicted move after seven days is 3%.
What analysts are saying
Deutsche Bank analyst Bryan Keane told the investor in a research note that the weakness seen recently in the stock is attributed to concerns regarding confluence events that could less favorably alter the company's business model. The analysts said that most of the concerns are minor and will not materially impact fundamentals or financial results. Keane is optimistic that the recent Amazon surcharges witnessed in Australia and Singapore on Visa cards will be addressed via incentives and merchant-specific pricing. Regarding the upcoming Federal reserve debt routing decision regarding clarity on whether card-no-present transactions have to be in line with the Durbin rule, the analyst believes the dual signature routing alternative of the network is a superior-tech option to singular message debt rails.
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