Shares of Visa Inc (NYSA: V) are up only 6.0% year-to-date, but New Street Advisors’ Delano Saporu says it’s a “good buy” ahead of earnings next week.
Reasons Saporu likes Visa Inc
On CNBC’s “Trading Nation”, Saporu made a bullish case on Visa based on its strong fundamentals.
“They’re at minimum Capex, they have high margins, and they’ve been buying back stock. So, I think investors should look at this stock that’s up only 6.0% year-to-date as an opportunity to buy.”
Other reasons he likes Visa include a large total addressable market and about 85% of global transactions still being done in cash, which represent tremendous room for Visa to grow. Earlier this month, Visa expanded its footprint in the BNPL space and launched “Visa Installments” in Australia in collaboration with ANZ and Quest.
Operational metrics have improved
Relevant operational metrics like payment volumes and processed transactions were down last year as the pandemic weighed on spending.
An accelerated shift to digital payments this year, however, has helped Visa perform well in the first three quarters, and Saporu expects the streak to continue in Q4. He’s convinced that the operational metrics will get even better in the holiday season, helping the stock climb in the coming months.
Visa is expected to report $1.53 of per-share earnings for the fourth quarter that translates to an over 36% increase on a year-over-year basis. $6.48 billion in expected Q4 revenue also represents an annualised growth of 27%.
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