Visa (V) Stock Rises as Q4 2023 Earnings Results Exceed Analyst Expectations

Visa (V) Stock Rises as Q4 2023 Earnings Results Exceed Analyst Expectations

UTC by Mercy Tukiya Mutanya · 3 min read
Visa (V) Stock Rises as Q4 2023 Earnings Results Exceed Analyst Expectations
Photo: Depositphotos

Visa stock is up by about 23% over the past 12 months and only slightly down from July 2021’s all-time high of $252.67.

Visa Inc (NYSE: V) stock rose 1.35% in Tuesday’s regular session following the release of the company’s earnings results for its fiscal Q4 2023 on Tuesday. The shares rose to $234.65, trading between the 50-day and 200-day lines.

The payments giant’s earnings results late Tuesday exceeded analyst predictions for the quarter as transaction volume increased due to an increase in consumer spending as inflation cools.

Visa’s net income for the quarter rose 19% year-over-year to $4.7 billion or $2.27 per share. Net revenue was $8.6 billion, beating the $8.5 billion projected by analysts. The firm also reported adjusted earnings growth of 21% to $2.33 per share on 10.6% revenue growth to $8.6 billion. Analysts polled by FactSet projected 16.6% earnings growth to $2.25 per share adjusted on 9.9% revenue growth to $8.56 billion.

Payments volume for the quarter also rose by 9% with a 16% spike in cross-border volumes on a constant basis while processed transactions increased by 10%. The payments firm’s data processing revenues increased 13% to $4.26 billion while service revenue growth rose 12% to $3.88 billion.

“Throughout the year, we have seen resilient consumer spending, ongoing recovery of cross-border travel spend versus 2019 and continued growth across our new flows and value-added services businesses,” Visa Inc CEO Ryan McInerney said in a statement. “As we enter a new fiscal year, I am confident in our ability to deliver against a backdrop of geopolitical and economic uncertainty.”

While this is Visa’s third consecutive quarter of besting earnings estimates, the coming months may not be as smooth for the card issuer. The United States Federal Reserve is expected to lower the limit on debit card fees that banks charge to retailers for transactions which could lead to a drop in credit card fees.

The news does not appear to not have had a significant effect on the company’s Q4 2023 results, it impacted Visa stock performance in October and has the potential to cause issues in the coming quarters.

Another issue is the potential for financial pressure on consumers due to inflation and lingering high-interest rates. Credit card delinquency has been on the rise this year, with credit card debt in the US exceeding $1 trillion for the first time in Q2.

This could not only impact Visa’s stock performance but also draw increased scrutiny from lawmakers, who have previously hinted at capping credit card interest rates.

Visa stock is up by about 23% over the past 12 months and only slightly down from July 2021’s all-time high of $252.67.

The company expects high single-digit to low double-digit net revenue growth in the 2024 fiscal year. Adjusted earnings are projected to shed about 5.5% due to acquisition-related costs. Visa also expects GAAP earnings growth to be in the high teens. It raised its quarterly dividend nearly 16% to 62 cents a share and announced that it is planning a multi-year, $25 billion stock buyback.

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