Are there any positive indications of Visa Inc.’s (V) near-term outlook?           

Visa Inc. (V) released the results of the second quarter of 2021 after the market closed on April 28, 2021. The company’s revenues and profits declined year over year, but still exceeded Wall Street’s predictions.

During the past quarter, Visa had revenues of $ 5.7 billion (versus a forecast of $ 5.5 billion), and net income (non-GAAP) was $ 3 billion, or $ 1.38 per share, which is also slightly above expectations. International transactions were low, which led to the revenue decline. As a result of the pandemic and a reduction in international business and leisure travel, that number declined 11 % year over year. In addition, Visa pointed out some positive trends, including an increase in the transaction volume made by 5%. During the quarter, credit cards and gift cards’ transactions have increased while debit cards and e-commerce activity have been rated as “good”.

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Due to the pandemic’s impact on the global economy, Visa is wary of making mid-term forecasts. Although, the company notes that “recoveries are underway in many key international markets.”

In the US market, a certain amount of stimulus money earmarked by the Senate, estimated to be nearly $1.9 billion, could be one of the reasons why Visa is flourishing. Additional money will be provided to the economy, and there is a likelihood that consumers will become more active. Visa, for instance, will benefit in this case as well.

Additionally, the vaccination can influence consumer behaviour to the extent that international tourism will recover thanks to preventive measures. This would affect, in turn, Visa’s volume of transactions.

Visa Inc. (V) shares were up 0.06% at $237.0 in Thursday’s aftermarket. Visa Inc. stock gained 1.46% to finish the last trading session at $236.86. The stock recorded a trading volume of 7.41 million shares, which is lower than the average daily volume, 8.96 million shares, for the last 50 days. In the past five days, Visa Inc. stock has shot up 4.08% but has gained 11.78% in the last month. During the past three months, the stock has increased by 19.49%, and so far this year has shown a return of 8.29%. Further, the stock is currently trading at a P/E ratio of 54.49. Furthermore, its price to cash flow ratio stands at 75.02 and its price to sales ratio stands at 23.32.

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