Visa Inc. (NYSE: V) operates a global digital payments platform and is a leading credit/debit card provider. The Coronavirus Pandemic has slowed consumer spending, but some areas of the market have expanded. Online shopping for consumer staples and basic goods was up in the previous quarter, and this led to a boost in demand for digital services offered by Visa.
In the company’s most recent fiscal quarter, net revenue increased by 7%, net income increased by 4%, and earnings per share increased by 6%.
Historically, the company has been a strong fiscal performer. It has adapted well to eCommerce and globalization. Revenue has increased in the previous five fiscal years. Total revenue for 2019 was up by 11.49%, while gross income was up by 12.49%. The company is highly profitable with a gross margin of 79.02% and an EBITDA margin of 69.88%.
This profitability makes the company cash-rich, giving it more stability in times of economic uncertainty. It reported free cash flow of $12.03 billion at the end of 2019. Even with continued disruption from the Coronavirus, Visa has the flexibility to remain operational and even profitable. Analysts predict an average target price of $208.32 on the stock, but this could be revised, considering the momentum today. In addition to growth potential, there’s also a modest dividend yield of 0.62% at today’s price.
This is easily one of the best fintech stocks to watch in the current quarter.
- 1 Year Price Growth: 21%
- YTD Price Growth: 80%
- 3 Month Price Growth: 89%
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