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Visa Inc. (V), headquartered in San Francisco, California, operates a retail electronic payments network and manages global financial services. Valued at $589.9 billion by market cap, the leading digital payments company also offers global commerce by transferring value and information among financial institutions, merchants, consumers, businesses, and government entities.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and V definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the credit services industry. Visa provides value-added services to its clients including fraud and risk management, debit issuer processing, loyalty services, dispute management, digital services like tokenization as well as consulting and analytics.
Despite its notable strength, Visa slipped 1.4% from its 52-week high of $317.42, achieved on Dec. 2. Shares of Visa rose 12.4% over the past three months, outperforming the S&P 500 Index’s ($SPX) 9.4% gains during the same time frame.
In the longer term, shares of Visa rose 20.2% on a YTD basis and climbed 22.1% over the past 52 weeks, underperforming SPX’s YTD gains of 26.8% and solid 31.7% returns over the last year.
To confirm the bullish trend, Visa has traded above its 50-day and 200-day moving averages since late August.
In the wake of a Department of Justice investigation into alleged anticompetitive practices, Visa has faced challenges that have impacted its performance.
On Oct. 29, Visa shares closed down marginally after reporting its Q4 results. Its adjusted EPS of $2.71 topped Wall Street expectations of $2.58. The company’s revenue was $9.6 billion, beating Wall Street forecasts of $9.5 billion.
In the competitive arena of credit services, Mastercard Incorporated (MA) has taken the lead over Visa, showing resilience with a 23.4% uptick on a YTD basis and a solid 27% gain over the past 52 weeks.
Wall Street analysts are bullish on Visa’s prospects. The stock has a consensus “Strong Buy” rating from the 37 analysts covering it, and the mean price target of $326.41 suggests a potential upside of 4.3% from current price levels.
