Jeremy Bowman, The Motley Fool
·2 min read
Shares of Visa (NYSE: V) were falling today after the credit card processing giant posted a narrow beat on the top and bottom lines in its first-quarter earnings report, but it wasn't enough to impress investors. Rival American Express also delivered a strong earnings report this morning, which investors may have interpreted as a sign that AmEx is outperforming Visa. Concerns about the global economy also seemed to weigh on the stock.
As of 12:14 p.m. ET, Visa stock was down 1.6% after falling as much as 2.7% earlier in the session.
Visa delivers a solid quarter
The report itself left little to complain about. Payments volume was up 8%, and cross-border volume continues to rebound after struggling during the pandemic, up 16%.
Overall revenue rose 9% to $8.63 billion, beating expectations of $8.54 billion. On the bottom line, it reported adjusted earnings-per-share growth of 11% to $2.41, which beat the consensus at $2.34.
The company continued to return cash to shareholders, spending $4.4 billion on share repurchases and dividends, nearly equal to its generally accepted accounting principles (GAAP) net income of $4.9 billion.
CEO Ryan McInerney said, "Looking ahead, we continue to see significant opportunity across consumer payments, new flows, and value-added services."
After the second quarter started, the company acquired Pismo, a global cloud-native issuer processing and core banking platform.
What's next for Visa?
Visa's guidance for 2024 was also promising, as the company called for revenue growth of upper-mid to high-single-digit revenue for the second quarter, and high-teens earnings per share (EPS) growth. For the full year, Visa sees low-double-digit revenue growth and low-teens EPS growth.
Despite the solid results, analysts seemed concerned about a weak global consumer and tailwinds in the travel sector fading.
The stock remains expensive at a price-to-earnings ratio of 31, but investors may want to take advantage of the pullback, as the stock deserves to trade at a premium.
Should you invest $1,000 in Visa right now?
Before you buy stock in Visa, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Visa wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of January 22, 2024
American Express is an advertising partner of The Ascent, a Motley Fool company. Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Visa. The Motley Fool has a disclosure policy.
Why Visa Stock Was Slipping Today was originally published by The Motley Fool
