In July of 2019, Visa Inc. (V) posted adjusted earnings per share (EPS) for its fiscal Q3 of $1.37 on $5.84 billion in revenue, about 3.5% above analyst consensus. As a stalwart of the financial services industry, Visa tends to outperform analyst EPS expectations more than 9 times out of 10.

Now, as the credit card giant reports earnings on October 24 for fiscal Q4 2019, investors will be watching the key metric of payments volume growth as a gauge of Visa's performance over the prior quarter. Analysts expect Visa to report EPS GAAP of $1.42 for Q4 as the company's stock has climbed by more than 32% year-to-date and by more than 25% in the trailing 12-month period.

Visa TradingView 10.21.2019
Source: TradingView.

In recent periods, Visa has reported fairly consistent gains in revenue, with a percent change year-over-year of 11.45% for June 30 of 8.30% for March 31 and 13.24% for December 31, 2018. For the most recent fiscal quarter, Visa saw a healthy payments volume growth rate of 9%, year-over-year. When Visa reported EPS of $1.37 for fiscal Q3 of this year, marking an upside surprise, the stock reacted by actually falling by about 1.7% in after-hours trading. Nonetheless, the exceptional growth of the stock overall throughout the year had largely not been disrupted up to that point.

Visa's payments volume, referencing the total value of payments taking place across the company's financial platform, has grown steadily in recent fiscal Q4s.

V Key Metrics
  Estimate for Q4 2019 Q4 2018 Q4 2017
Earnings Per Share $1.43 $1.23 $0.90
Revenue (billions) 6.08 5.43 4.86
Payments Volume Growth N/A 11% 10%
Visa Earnings for Q4 2019

Note: Table reflects Visa's fiscal Q4, which ends in September.

For credit card companies like Visa, payments volume is a key indicator of performance. For the prior quarter, Visa Inc. reported more than $2.2 trillion in total payments volume. Alongside cross-border volume and processed transactions, both of which also grew into the company's fiscal Q3, payments volume contributed to impressive net revenues for the period ending June 30, 2019.

The company's "network of networks" strategy, which emphasizes acquisitions and expansion outside of Visa's core network in an effort to provide wider coverage across financial institutions and borders, has paid off in earlier quarters this year. Continued high performance here and in the business-to-business space could continue to drive Visa's performance into the most recent quarter. The cross border business space is a $100 trillion market.

Looking ahead to Visa's fiscal Q4, if payments volume has remained steady or improved, then revenue, EPS and other performance metrics are more likely meet or exceed analyst expectations as well.