Visa (V) AI Stock Analysis

• Market Cap: $651.32B
• Dividend Yield: 0.66%
• Average Volume (3M): 8.20M
• Price to Earnings (P/E): 34.1
• Beta (1Y): 0.74
• Revenue Growth: 10.35%
• EPS Growth: 16.40%
• Country: US
• Employees: 28,800
• Sector: Financial
• Sector Strength: 84
• Industry: Financial - Credit Services
• EPS (TTM): 2.75
• Shares Outstanding: 1,723,362,300
• 10 Day Avg. Volume: 9,369,755
• 30 Day Avg. Volume: 8,198,563
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 16.94
• Price to Cash Flow (P/CF): 28.90
• P/FCF Ratio: 28.90
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 21.83
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $381.88
• Price Target Upside: 13.15% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 29

Visa's overall stock score of 82 is driven by its strong financial performance and positive earnings call outcomes, showcasing robust growth and strategic initiatives. While technical indicators and valuation present some caution, the company's leadership in the credit services industry supports a positive outlook.

Positive Factors

Growth Potential

Visa is focused on its next frontier of growth outside of the core network, adding VAS and commercial/B2B payments as major avenues of top-line growth at similar margin levels to the core business.

Market Position

Visa's stock price has held up the best among the names in our coverage group and will also likely remain a relative outperformer and defensive play if the tape remains very cautious.

Technological Innovation

Tokens help create seamless payment experiences by improving approval rates by 4.7% while reducing fraud rates 34%, providing a tailwind to volume growth and improving Visa’s competitive position.

Negative Factors

Market Concerns

Visa's Investor Day helped address potential investor concerns around the remaining runway in consumer payments, even in more digitally mature markets.

Market Share Dependency

Visa is well positioned for commercial/B2B growth, and big market share in US debit could buffer slower spending in a downturn.

Visa Business Overview & Revenue Model

Company Description

Visa 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 Money

Visa 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.

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.

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.

Breakdown
Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
35.93B	32.65B	29.31B	24.11B	21.85B
	Gross Profit
28.88B	26.09B	23.58B	19.14B	17.33B
	EBIT
23.59B	21.00B	18.81B	15.80B	14.08B
	EBITDA
25.59B	22.62B	19.54B	17.38B	15.07B
	Net Income Common Stockholders
19.74B	17.27B	14.96B	12.31B	10.87B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
15.18B	20.13B	18.52B	18.51B	20.04B
	Total Assets
94.51B	90.50B	85.50B	82.90B	80.92B
	Total Debt
20.84B	20.46B	22.45B	20.98B	24.07B
	Net Debt
8.86B	4.18B	6.76B	4.49B	7.78B
	Total Liabilities
55.37B	51.77B	49.92B	45.31B	44.71B
	Stockholders Equity
39.14B	38.73B	35.58B	37.59B	36.21B
Cash Flow		Free Cash Flow
18.69B	19.70B	17.88B	14.52B	9.70B
	Operating Cash Flow
19.95B	20.75B	18.85B	15.23B	10.44B
	Investing Cash Flow
-1.93B	-2.01B	-4.29B	-152.00M	1.43B
	Financing Cash Flow
-20.63B	-17.77B	-12.70B	-14.41B	-3.97B

Visa Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 337.51
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For V, the sentiment is Positive. The current price of 337.51 is above the 20-day moving average (MA) of 331.64, below the 50-day MA of 340.03, and above the 200-day MA of 305.69, indicating a neutral trend. The MACD of -1.10 indicates Negative momentum. The RSI at 52.61 is Neutral, neither overbought nor oversold. The STOCH value of 79.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for V.

Visa Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
V	82 Outperform	$651.32B	34.06	50.51%	0.66%	10.35%	16.40%
MA	79 Outperform	$464.74B	36.70	191.95%	0.51%	12.07%	17.27%
DFS	78 Outperform	$46.51B	9.88	28.31%	1.51%	9.42%	128.55%
PYPL	77 Outperform	$61.92B	15.66	20.00%	―	7.10%	4.45%
AXP	74 Outperform	$179.05B	18.22	34.02%	1.06%	8.45%	17.89%
COF	73 Outperform	$69.98B	15.54	7.90%	1.31%	6.69%	-6.76%
Sector *	63 Neutral	$12.31B	9.55	7.88%	79.24%	12.71%	-4.71%