Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A . 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, increase in net income, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 10.8%. Since the same quarter one year prior, revenues rose by 14.6%. Growth in the company's revenue appears to have helped boost the 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. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.19, which illustrates the ability to avoid short-term cash problems.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 88.9% when compared to the same quarter one year prior, rising from $880.00 million to $1,662.00 million.
- Net operating cash flow has significantly increased by 57.71% to $1,369.00 million when compared to the same quarter last year. In addition, VISA INC has also vastly surpassed the industry average cash flow growth rate of -5.78%.
- The gross profit margin for VISA INC is rather high; currently it is at 59.10%. Regardless of V's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, V's net profit margin of 60.85% significantly outperformed against the industry.
Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. Visa has a market cap of $79.86 billion and is part of the services sector and diversified services industry. The company has a P/E ratio of 47.2, above the S&P 500 P/E ratio of 17.7. Shares are up 48.4% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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