The payment services provider tumbled on Kommersant reports Russian regulators are considering restricting the movement of cross-border electronic funds. The Russian newspaper said newly drafted laws could limit anonymous domestic e-funds payments and ban anonymous cross-border payments in a move to curb terrorism and money laundering.
If passed, the laws would prove a challenge to the Cyprus-based Qiwi which owns and operates internet-based ATMS in Russia and the Commonwealth of Independent States.
Shares hit their lowest level since November 2013 and saw their biggest drop since the company's IPO in May.Competitors Visa (V) and The Western Union (WU) were unaffected by the news, up 0.67% to $224.15 and 0.12% to $16.54, respectively. TheStreet Ratings team rates VISA INC as a Buy with a ratings score of A. The team has this to say about their recommendation: "We rate VISA INC (V) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income." Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 22.8%. Since the same quarter one year prior, revenues slightly increased by 8.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- V has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, V has a quick ratio of 1.59, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for VISA INC is rather high; currently it is at 62.46%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 40.09% significantly outperformed against the industry average.
- Net operating cash flow has increased to $2,045.00 million or 49.37% when compared to the same quarter last year. In addition, VISA INC has also vastly surpassed the industry average cash flow growth rate of -13.17%.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the IT Services industry and the overall market on the basis of return on equity, VISA INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full analysis from the report here: V Ratings Report
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