Visa (V) AI Stock Analysis

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Visa

(NYSE:V)

82Outperform

Visa's overall stock score of 82 reflects its strong financial performance, robust earnings growth, and positive technical indicators. The company's high profitability and effective cash flow management are significant strengths. While the valuation suggests the stock may be overvalued, the positive guidance from the earnings call supports continued growth. Visa's strong market position and innovation in payment services contribute to its solid score.

Positive Factors

Consumer Spending

Visa has seen no signs of weakening consumer spending, with solid trends across discretionary and non-discretionary categories in the U.S.

Earnings

Visa reported adjusted earnings per share that exceeded consensus estimates, indicating strong financial performance.

Financial Performance

Visa's revenue and earnings growth are expected to be more enduring than anticipated, supported by its competitive position and higher-growth new flows.

Negative Factors

Cross-Border Growth

Cross-border growth slowed from 16% in the first fiscal quarter to 13% in the second fiscal quarter, attributed to timing of Easter and Ramadan, weaker currencies in certain countries, and softer Canada to US inbound travel.

Growth Concerns

Underlying transaction and volume were softer than expected, raising concerns about the durability of topline growth for Visa.

Visa (V) vs. S&P 500 (SPY)

Market Cap

$674.33B

Dividend Yield0.64%

Average Volume (3M)7.54M

Price to Earnings (P/E)35.4

Beta (1Y)0.73

Revenue Growth10.19%

EPS Growth12.45%

CountryUS

Employees28,800

SectorFinancial

Sector Strength87

IndustryFinancial - Credit Services

Share Statistics

EPS (TTM)2.75

Shares Outstanding1,710,985,100

10 Day Avg. Volume6,564,489

30 Day Avg. Volume7,542,062

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.03

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit24.09

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$379.71

Price Target Upside9.24% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering26

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 Key Performance Indicators (KPIs)

Any

Transactions

Transactions
Monitors the volume of transactions processed, indicating Visa's market reach, network reliability, and potential for revenue growth.

Chart InsightsVisa's transactions have shown consistent growth, with a notable increase in both payments and processed transactions over recent years. The latest earnings call underscores this trend, highlighting an 11% year-over-year increase in processed transactions and robust growth in digital payments. Visa Direct's expansion, with nearly 3 billion transactions this quarter, further supports this momentum. Despite challenges in the Asia-Pacific region and currency impacts, Visa's strategic focus on digital channels and international partnerships is driving sustained growth and enhancing its market position.

Data provided by:

Main Street Data

Visa Financial Statement Overview

Summary

Visa exhibits outstanding financial health across all verticals. The income statement highlights impressive growth and profitability, the balance sheet reveals a stable financial position with manageable leverage, and cash flow metrics indicate strong cash generation and management. Visa's financial performance is characterized by robust growth, high profitability, and effective cash flow management, making it a well-rounded and financially resilient company in the credit services industry.

Income Statement

―

Visa has demonstrated robust revenue growth, with a 14.27% increase from 2023 to 2024 and a subsequent rise to a TTM total of $37.62 billion. The company's gross profit margin is strong at 79.71%, indicating excellent operational efficiency. Net profit margin remains impressive at 52.85%, reflecting effective cost control. The EBIT and EBITDA margins are also high at 63.67% and 66.88%, respectively, underscoring substantial profitability. Overall, Visa shows a solid growth trajectory with exceptional profitability metrics.

Balance Sheet

Visa maintains a solid financial position with a debt-to-equity ratio of 0.55, indicating moderate leverage. The equity ratio stands at 40.95%, suggesting a healthy proportion of assets financed by equity. The return on equity (ROE) is robust at 52.3%, highlighting high profitability relative to shareholder investment. While leverage is manageable, continued monitoring is essential to ensure balance sheet stability.

Cash Flow

―

Visa's cash flow performance is strong, with a free cash flow of $20.51 billion in TTM, showing consistent generation of cash. The free cash flow growth rate from 2023 to TTM is notable at 8.22%, reflecting effective cash management. The operating cash flow to net income ratio is a solid 1.10, indicating efficient conversion of income to cash. Free cash flow to net income ratio is also healthy at 1.03. Visa demonstrates a strong ability to generate and manage cash flows effectively.

Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
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 Price347.60

Price Trends

50DMA

339.25

Positive

100DMA

332.99

Positive

200DMA

307.28

Positive

Market Momentum

MACD

1.84

Negative

RSI

58.69

Neutral

STOCH

91.32

Negative

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 347.6 is above the 20-day moving average (MA) of 331.37, above the 50-day MA of 339.25, and above the 200-day MA of 307.28, indicating a bullish trend. The MACD of 1.84 indicates Negative momentum. The RSI at 58.69 is Neutral, neither overbought nor oversold. The STOCH value of 91.32 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
V	82 Outperform	$674.33B	35.36	50.03%	0.64%	10.19%	12.45%
DFS	78 Outperform	$47.88B	10.17	28.29%	1.47%	9.42%	128.55%
MA	77 Outperform	$464.74B	36.70	188.92%	0.51%	12.94%	13.22%
AXP	76 Outperform	$179.05B	18.22	34.02%	1.05%	8.45%	17.89%
PYPL	74 Outperform	$65.39B	15.08	22.20%	―	4.50%	12.82%
COF	73 Outperform	$71.93B	15.77	7.90%	1.28%	6.69%	-6.76%
Sector *	64 Neutral	$12.61B	9.78	8.01%	16985.69%	12.73%	-4.58%

* Financial Sector Average

Performance Comparison

Visa

347.60

76.95

28.43%

AXP

American Express

276.85

45.14

19.48%

COF

Capital One Financial

187.83

46.62

33.01%

DFS

Discover Financial Services

190.31

67.23

54.62%

Mastercard

559.39

112.65

25.22%

PYPL

PayPal Holdings

67.24

1.63

2.48%

Visa Earnings Call Summary

Earnings Call Date:Apr 29, 2025

(Q2-2025)

% Change Since: 1.78%|

Next Earnings Date:Jul 29, 2025

Earnings Call Sentiment Positive

Visa's earnings call highlighted strong financial performance, growth in cross-border transactions, and successful expansion in consumer payments and value-added services. However, challenges such as deceleration in travel growth, currency impacts, and increased client incentives were noted. Overall, the positive aspects of growth and innovation slightly outweigh the challenges.

Q2-2025 Updates

Positive Updates

Strong Financial Performance

Visa reported $9.6 billion in net revenue, up 9% year-over-year, and EPS up 10%. Payments volume grew 8% year-over-year in constant dollars.

Growth in Cross-Border and Payments Volume

Cross-border volume, excluding Intra-Europe, rose 13% in constant dollars, and process transactions grew 9% year-over-year.

Expansion in Consumer Payments

Total credentials grew 7%, and nearly 50% of e-commerce transactions globally are tokenized. Tap to Pay penetration reached 76% globally.

Commercial and Money Movement Solutions Growth

Commercial volume up 6% in constant dollars, Visa Direct transactions up 28%, and CMS revenue up 13% year-over-year in constant dollars.

Value-Added Services Revenue Surge

Value-added services revenue grew 22% in constant dollars, powered by strong growth across all portfolios.

New Product Developments

Visa launched new products like Tap to P2P, and expanded its stablecoin settlement program, surpassing $200 million in cumulative volume.

Share Repurchase Program

Visa's Board of Directors authorized a new $30 billion multiyear share repurchase program.

Negative Updates

Deceleration in Travel and Entertainment Growth

Travel and entertainment growth decelerated in the US, with some selective areas like airlines and lodging showing slower growth.

Canada to US Travel Slowdown

There was a meaningful slowdown in the Canada to US travel corridor, impacting cross-border volumes.

Impact of Currency Weakness

Weaker currencies in certain countries affected cross-border volume growth, particularly impacting travel to specific countries.

Higher Client Incentives

Client incentives grew 15%, with expectations of further growth in the back half of the year due to client performance adjustments and deal timing.

Company Guidance

During Visa's fiscal second quarter 2025 earnings call, the company provided robust guidance, reflecting strong financial performance amidst a dynamic environment. Visa reported a 9% year-over-year increase in net revenue to $9.6 billion, with EPS rising 10%. Key metrics highlighted include an 8% growth in overall payments volume in constant dollars, 6% growth in US payments volume, 9% growth in international payments volume, and a 13% rise in cross-border volume excluding Intra-Europe. The company also noted a 9% increase in process transactions. Visa continues to innovate and expand its reach, adding 1 billion tokens since the last quarter, totaling 13.7 billion tokens globally, and achieving a 76% global penetration in Tap to Pay transactions. The company remains focused on its strategy across consumer payments, commercial and money movement solutions, and value-added services, with value-added services revenue growing 22% in constant dollars. Visa's guidance suggests continued strong performance, with expectations for third-quarter adjusted net revenue growth in the low-double-digits and adjusted EPS growth in the high-teens.

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.