Visa (V) beats profit estimate; Robinhood (HOOD) monthly users jump 76%

Highlights

  • Visa Inc’s (NYSE: V) net income increased to US$1.65 per share in the fourth quarter of FY2021, above analysts' estimate of US$1.54 a share, according to Refinitiv data.

  • Visa’s total payment volumes rose 17% from the year-ago quarter. Likewise, the number of transactions processed jumped 21% to 45.3 billion.

  • Robinhood Markets Inc’s (NASDAQ: HOOD) net revenues increased by 35% to US$365 million in the third quarter from US$270 million in the year-ago period.

Payment solutions provider Visa Inc (NYSE: V) and trading app Robinhood Markets Inc (NASDAQ: HOOD) on Tuesday reported solid revenue growth in their latest quarters after the closing bell.

Both the stocks were trading low after the results. The V stock fell 3.69% to US$223.275, and HOOD stock sank 8.77% to US$36.10 in after-hours, well below the offering price of US$38 in July IPO.

Quarterly Highlights

Visa Inc

Visa Inc’s profit topped Wall Street expectations, boosted by increased transactions from a travel recovery. However, cross-border travel was still below the pre-pandemic levels, the world's largest payment processor said.

CFO Vasant Prabhu said the company has been on a recovery track over the past few quarters. However, he added that the resumption of cross-border travel in the Asia-Pacific region would be crucial to recovery.

Its net income increased to US$1.65 per share in the fourth quarter of FY2021, above analysts' estimate of US$1.54 a share, according to Refinitiv data. The company said the North American markets saw robust demand for travel and shopping ahead of the holidays.

Its total cross-border volume in the September quarter jumped 38% YoY. The company now expects its first-quarter fiscal 2022 net revenue growth to be in the high teens.

Visa said the recovery in cross-border travel will continue through fiscal 2022.

Visa’s total payment volumes rose 17% from the year-ago quarter. Likewise, the number of transactions processed jumped 21% to 45.3 billion.

The stock rose around 2.5% year-to-date. Its 52-week highest and lowest prices were US$252.67 and US$179.23, respectively.

In addition, the P/E ratio is 46.83, the forward P/E one-year ratio is 40.19, and the EPS is US$4.95. The annualized dividend is US$1.28. Visa Inc has a market cap of US$493.038 billion.

Also Read: Alphabet Inc (GOOGL), Microsoft Corp see profits soar in Q3

 

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Image description: Visa Inc (V) beats profit estimate; Robinhood (HOOD) monthly users rise 76%

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The California-headquartered Robinhood’s net revenues increased by 35% to US$365 million in the third quarter FY21 from US$270 million in the year-ago period.

Its transaction-based revenues jumped 32% to US$267 million against US$202 million in Q3 of 2020. In addition, Options rose 29% to US$164 million against US$127 million a year ago.

The cryptocurrency segment soared 860% to US$51 million from US$5 million in Q3 of 2020. The company, however, said the crypto activity declined from record highs in the previous quarter. In Q2, the platform saw many new customers due to huge interest in dogecoin, CEO Vlad Tenev said.

The equities segment declined 27% to US$50 million from US$69 million in the same period a year ago. Robinhood’s net loss was US$1.32 billion, or US$2.06 per diluted share, against a net loss of US$11 million, or US$0.05 per diluted share, in the year-ago quarter.

In addition, its monthly active users (MAU) rose by 76% to 18.9 million from 10.7 million a year ago.

Robinhood Markets Inc has a market cap of US$33.84 billion.

Bottomline

Both the stocks will gain from a faster economic recovery. The pandemic-related uncertainties have been a major obstacle to business growth. However, investors should evaluate the companies carefully before investing in stocks.

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