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Visa’s Quarterly Earnings Excite Many and Here’s Why

Visa’s quarterly earnings came through last week. The first-quarter results were exciting for many investors. But they have been in line with expectations. Revenues hit about $6.05 billion. Earnings per share were about $1.46 as well. This has led to many wondering if centralized payments are still the way to go. It is also a 10% increase from 2018. 

It has also reinforced the common belief that the payments industry is still going strong. This also is in line with post-earnings forecasts which point to a bright future for the payment processor. 

Many analysts believe Visa will cross the $25 billion mark in 2020. This represents a 7.8% increase in sales revenues from last year. A growth rate of between 12-14% is expected by some as well. Earnings per share are also expected to increase to $6.19. This further reinforces the view that Visa will remain a key player in international payments for many years to come. Many analysts also expect share prices to remain at an average of $224. A range of between $166 and $251 per share is also expected as well. Both views are from both ends of extreme situations in terms of performance.

The average growth rate of 7.8% is below the industry average. The competitors’ revenues are expected to grow by about 11%. A shattering 13% growth rate in five previous years has been phenomenal as well. This has been seen by some as mediocre for such as stellar stock. Visa is trading for about 36.7 its year-long earnings value. It also trades for 27.7 times its projected 12-month projected revenues. This has made many investors worry about the core value of the stock. It has also questioned the sustainable performance of the stock itself as well. It, however, hasn’t dampened the enthusiasm of many who see a less risky player in the payments market. 

This is indicative of steady returns for investors. It also points to a company that will remain a strong performer in the payments market as well. This is besides the recent acquisition of Plaid. That has also generated its own set of positive indications for Visa. Acquisitions of high-growth unicorns may work well for Visa this year. The company also has a history of offering cash returns to shareholders. It has returned $3 billion to shareholders in quarter one. This was achieved using dividends. The yields were about 0.6%.

Share repurchases were included as well. A $10 billion share repurchase program was also announced as well. It is worth about 2.2% of Visa’s worth ( about $445 billion). This gives the stock its rightful place with winners such as Apple (AAPL) and Microsoft (MSFT). Both are already in the Trillion-dollar club. If the figures are anything to go by, Visa is et to break records this decade. It already is the decade of fintech companies. 

At the time of filing this report, Visa’s (V) share prices stood at $200.81 per share. This is a 0.92% increase since the last trading session. 

Visa’s Quarterly Earnings Excite Many and Here’s Why

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