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Visa Inc. (V)
:V
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Visa
(NYSE:V)
84Outperform
Positive Factors
Competitive Position
High barriers to entry in rapidly growing VAS services, like cybersecurity, indicate Visa's strong competitive position.
Financial Performance
Visa's revenue and earnings growth are expected to be more enduring than investors anticipate, thanks to its formidable and well-tested competitive position.
Revenue Growth
The sustainability of strong VAS revenue growth is supported by the fact that Visa is just scratching the surface with only ~2% total addressable market penetration.
Negative Factors
Investor Concerns
Visa's Investor Day helped address potential investor concerns around the remaining runway in consumer payments, even in more digitally mature markets.
Market Perception
Visa's premium card capabilities, such as airport lounge access and shopping benefits, are underappreciated and especially relevant for issuers without the scale to offer them.
Visa (V) vs. S&P 500 (SPY)
Market Cap
$611.72B
Dividend Yield0.71%
Average Volume (3M)7.92M
Price to Earnings (P/E)32.0
Beta (1Y)0.71
Revenue Growth10.35%
EPS Growth16.40%
CountryUS
Employees28,800
SectorFinancial
Sector Strength80
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)9.79
Shares Outstanding1,723,362,300
10 Day Avg. Volume7,382,940
30 Day Avg. Volume7,923,922
Financial Highlights & Ratios
PEG Ratio1.95
Price to Book (P/B)N/A
Price to Sales (P/S)16.94
Price to Cash Flow (P/CF)28.90
P/FCF Ratio28.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$386.96Price Target Upside23.58% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering28
Visa Business Overview & Revenue Model
Company DescriptionVisa Inc. operates as a payments technology company worldwide. The company facilitates digital payments among consumers, merchants, financial institutions, businesses, strategic partners, and government entities. It operates VisaNet, a transaction processing network that enables authorization, clearing, and settlement of payment transactions. In addition, the company offers card products, platforms, and value-added services. It provides its services under the Visa, Visa Electron, Interlink, VPAY, and PLUS brands. Visa Inc. has a strategic agreement with Ooredoo to provide an enhanced payment experience for Visa cardholders and Ooredoo customers in Qatar. Visa Inc. was founded in 1958 and is headquartered in San Francisco, California.
How the Company Makes MoneyVisa Inc. makes money primarily through the collection of fees from financial institutions based on the payment volume of transactions processed through its network. Its revenue model includes service revenues, data processing revenues, and international transaction revenues. Service revenues are earned from financial institutions for the use of Visa's payment network to authorize and settle transactions. Data processing revenues are generated from processing transactions and providing related services. International transaction revenues are derived from cross-border transaction fees and currency conversion fees. Additionally, Visa also earns from licensing its brand and technology to card-issuing financial institutions and acquiring banks. Strategic partnerships with technology companies and financial institutions further enhance its earnings and market reach.
Visa Financial Statement Overview
Summary
Visa demonstrates exceptional financial health across all verticals. The company showcases strong growth, profitability, and cash generation capabilities, supported by a stable balance sheet. While the leverage is manageable, continued focus on maintaining efficient capital structure will be beneficial.Income Statement
Visa exhibits a strong income statement with robust growth trends. The TTM (Trailing-Twelve-Months) shows a Gross Profit Margin of 85.37% and a Net Profit Margin of 54.27%, indicating excellent profitability. The Revenue Growth Rate from the previous year stands at 12.70%, demonstrating healthy expansion. EBIT and EBITDA Margins are also high at 66.11% and 69.04% respectively, reflecting efficient operations.95
Very Positive
Balance Sheet
The balance sheet is solid with a Debt-to-Equity Ratio of 0.54, indicating manageable leverage. The Return on Equity (ROE) for the latest TTM is 52.16%, showcasing strong shareholder returns. The Equity Ratio stands at 41.67%, suggesting a healthy equity base in relation to total assets. Stability is apparent, though vigilance on debt levels is advisable.85
Very Positive
Cash Flow
Cash flow performance is impressive with a Free Cash Flow Growth Rate of 9.12% from the prior period, indicating positive cash generation. The Operating Cash Flow to Net Income Ratio is 1.09x, and the Free Cash Flow to Net Income Ratio is 1.02x, both indicating strong cash conversion efficiency.90
Very Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 36.80B | 35.93B | 32.65B | 29.31B | 24.11B | 21.85B | Gross Profit |
| 29.40B | 28.88B | 26.09B | 23.58B | 19.14B | 17.33B | EBIT |
| 23.88B | 23.59B | 21.00B | 18.81B | 15.80B | 14.08B | EBITDA |
| 25.78B | 25.59B | 22.62B | 19.54B | 17.38B | 15.07B | Net Income Common Stockholders |
| 19.97B | 19.74B | 17.27B | 14.96B | 12.31B | 10.87B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 4.64B | 15.18B | 20.13B | 18.52B | 18.51B | 20.04B | Total Assets |
| 32.07B | 94.51B | 90.50B | 85.50B | 82.90B | 80.92B | Total Debt |
| 50.00M | 20.84B | 20.46B | 22.45B | 20.98B | 24.07B | Net Debt |
| -4.51B | 8.86B | 4.18B | 6.76B | 4.49B | 7.78B | Total Liabilities |
| 8.08B | 55.37B | 51.77B | 49.92B | 45.31B | 44.71B | Stockholders Equity |
| 23.98B | 39.14B | 38.73B | 35.58B | 37.59B | 36.21B |
| Cash Flow | Free Cash Flow | ||||
| 20.40B | 18.69B | 19.70B | 17.88B | 14.52B | 9.70B | Operating Cash Flow |
| 21.73B | 19.95B | 20.75B | 18.85B | 15.23B | 10.44B | Investing Cash Flow |
| 753.00M | -1.93B | -2.01B | -4.29B | -152.00M | 1.43B | Financing Cash Flow |
| -21.73B | -20.63B | -17.77B | -12.70B | -14.41B | -3.97B |
Visa Technical Analysis
Negative
313.13
Price Trends
344.45
Negative
328.84
Negative
301.11
Positive
Market Momentum
0.88
Negative
53.27
Neutral
71.61
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For V, the sentiment is Negative. The current price of 313.13 is below the 20-day moving average (MA) of 338.61, below the 50-day MA of 344.45, and above the 200-day MA of 301.11, indicating a neutral trend. The MACD of 0.88 indicates Negative momentum. The RSI at 53.27 is Neutral, neither overbought nor oversold. The STOCH value of 71.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for V.
Visa Risk Analysis
Visa disclosed 21 risk factors in its most recent earnings report. Visa reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Visa Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | $611.72B | 31.99 | 50.51% | 0.71% | 10.35% | 16.40% | |
77 Outperform | $37.00B | 8.30 | 24.68% | 1.90% | 15.46% | 45.83% | |
76 Outperform | $446.53B | 35.27 | 191.95% | 0.56% | 12.07% | 17.27% | |
74 Outperform | $57.74B | 14.60 | 20.00% | ― | 7.10% | 4.45% | |
71 Outperform | $163.84B | 16.67 | 34.47% | 1.20% | 10.12% | 24.93% | |
67 Neutral | $57.66B | 12.99 | 7.86% | 1.59% | 9.06% | -3.02% | |
63 Neutral | $12.86B | 9.19 | 9.16% | 4.78% | 16.31% | -8.97% |
* Financial Sector Average
Performance Comparison
V
Visa
313.13
37.43
13.58%
AXP
American Express
233.68
12.08
5.45%
COF
Capital One Financial
150.57
8.78
6.19%
DFS
Discover Financial Services
147.04
23.62
19.14%
MA
Mastercard
489.77
12.97
2.72%
PYPL
PayPal Holdings
58.37
-7.97
-12.01%
Visa Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: -8.57% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Positive
Visa's earnings call highlighted strong financial performance with significant growth in net revenue, cross-border volumes, and Visa Direct transactions. Successful renewals and expansions of international partnerships also contributed positively. However, challenges remain in the Asia-Pacific region with muted growth and potential impacts from a strong dollar on cross-border transactions. Overall, the highlights significantly outweigh the lowlights.Highlights
Strong Financial Performance
Visa reported $9.5 billion in net revenue, up 10% year-over-year, and an EPS increase of 14%. Processed transactions grew by 11% year-over-year.
Cross-Border Volume Growth
Cross-border volume excluding Intra-Europe rose 16% in constant dollars, demonstrating a strong recovery in international transactions.
Consumer Payment Credentials and Token Growth
Visa now has 4.7 billion credentials, up 7% year-over-year, and 12.6 billion tokens, up 44% year-over-year.
Successful International Partnerships
Visa renewed and expanded partnerships with major banks across China, India, New Zealand, and Latin America, securing long-term agreements and expanding market presence.
Visa Direct Transaction Growth
Visa Direct transactions crossed 10 billion over the last 12 months, with nearly 3 billion transactions this quarter, reflecting a 34% year-over-year growth.
Value-Added Services Revenue Growth
Revenue from value-added services grew 18% in constant dollars, driven by strong growth in consulting and marketing services, issuing solutions, and risk and identity solutions.
Lowlights
Muted Growth in Asia-Pacific
Payments volume growth in Asia-Pacific saw slight improvement but remained relatively mute with just above 1% year-over-year growth reflecting a still somewhat muted macroeconomic environment.
Impact of Strong Dollar
The strong dollar is affecting cross-border spending patterns, potentially leading to decreased inbound travel to the US and impacting consumer spending behavior.
Company Guidance
During Visa's fiscal first quarter 2025 earnings call, the company provided robust guidance with several key metrics indicating strong performance and growth. Net revenue reached $9.5 billion, up 10% year-over-year, while EPS increased by 14%. Payments volume grew by 9% in constant dollars, with US payments volume rising 7% and international payments volume up 11%. Cross-border volume, excluding Intra-Europe, rose by 16% in constant dollars, and processed transactions increased 11% year-over-year. The company also highlighted significant growth in digital payments, with 60% of volume from digital channels in CEMEA and Latin America. Visa Direct facilitated nearly 3 billion transactions this quarter, contributing to new flows revenue growth of 19% year-over-year in constant dollars. Additionally, value-added services revenue grew by 18% in constant dollars, driven by consulting, marketing services, and risk solutions. Visa's strategic initiatives, including expanding Visa Direct partnerships and enhancing value-added services, are expected to continue driving growth, with adjusted EPS growth projected in the low teens for the full year.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.