NEW YORK (TheStreet) -- Shares of Visa (V) - Get Visa Inc. Class A Report dipped 0.32% to $216.01 in afternoon trading Wednesday ahead of the company's scheduled fourth-quarter earnings report after the market close. Here's what analysts are expecting from the credit card giant.
The consensus estimate calls for Visa to report earnings of $2.10 a share on revenue of $3.19 billion. In the fourth quarter last year, Visa posted earnings of $1.85 a share, which matched the consensus estimate. Revenue totaled $2.97 billion, which came up short of analysts' estimate of $3.02 billion.
In the third quarter of 2014, Visa reported earnings of $2.17 a share, which surpassed the consensus estimate of $2.10 a share. Revenue totaled $3.15 billion, which was in line with analysts' expectations.
Separately, TheStreet Ratings team rates VISA INC as a "buy" with a ratings score of A-. TheStreet Ratings 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, growth in earnings per share, increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 10.9%. Since the same quarter one year prior, revenues slightly increased by 5.1%. 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 1.45, which illustrates the ability to avoid short-term cash problems.
- VISA INC has improved earnings per share by 15.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, VISA INC increased its bottom line by earning $7.58 versus $3.13 in the prior year. This year, the market expects an improvement in earnings ($8.99 versus $7.58).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the IT Services industry average. The net income increased by 11.0% when compared to the same quarter one year prior, going from $1,225.00 million to $1,360.00 million.
- The gross profit margin for VISA INC is rather high; currently it is at 67.48%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 43.10% significantly outperformed against the industry average.
- You can view the full analysis from the report here: V Ratings Report