Visa (NYSE: V) is set to report its fiscal Q2 2024 results on April 25, 2024, with expectations of surpassing consensus estimates for both earnings and revenues. The company’s last quarter saw a strong performance, with net revenues increasing by 9% year-over-year to $8.6 billion. Key metrics such as payments volume, cross-border volume, and number of processed transactions all showed positive growth, and analysts anticipate a similar trend in the upcoming second quarter results.
Despite some volatility, Visa’s stock has experienced gains of 25% since early 2021, currently trading around $270. However, the stock underperformed the S&P 500 in 2021, with returns of -1%, and has shown mixed performance in recent years. Analysts question whether Visa will be able to outperform the index in the face of current economic uncertainties, such as high oil prices and elevated interest rates. The Trefis High Quality Portfolio, a collection of 30 stocks, has consistently outperformed the S&P 500, indicating a more stable investment option for those looking to mitigate risk.
Visa’s revenues are expected to marginally exceed consensus estimates, with net revenues growing by 11% year-over-year in FY2023 and 9% in Q1 2024. Data processing revenues and services revenue have shown consistent growth, and international transactions revenues are expected to follow a similar pattern in the upcoming quarter. Overall, analysts forecast Visa’s net revenues to be around $35.97 billion in FY2024, with Q2 2024 revenues estimated to be $8.69 billion, slightly above the consensus estimate.
Visa’s adjusted earnings per share for Q2 2024 are expected to be $2.47, 1% higher than the consensus estimate of $2.44. The company’s net income increased by 15% year-over-year in FY 2023, driven by higher revenues and lower operating expenses as a percentage of revenues. Analysts anticipate a continuation of this trend in the second quarter, with Visa likely to report an annual GAAP EPS of $9.74 in FY 2024.
Based on an earnings per share estimate of $9.74 and a price-to-earnings multiple of just above 31x in fiscal 2024, analysts arrive at a valuation of $301 per share for Visa, which is 12% above the current market price. This estimate suggests that Visa’s stock has potential for further growth, providing investors with an opportunity for capital appreciation. Ultimately, investors will be closely watching Visa’s Q2 2024 results to see if the company can continue its positive momentum and deliver strong financial performance in line with expectations.
