Is Visa Stock A Buy Or Sell After Recent Earnings? (NYSE:V) (2024)

Is Visa Stock A Buy Or Sell After Recent Earnings? (NYSE:V) (1)

Visa (NYSE:V) comes to mind as a clear pandemic beneficiary, yet its stock has not reflected that sentiment. The stock jumped double-digits after its latest earnings report, as management guided for the next several years to see accelerated growth relative to pre-pandemic levels. Yet even after the jump, the stock remains priced barely higher than pre-pandemic levels, giving investors an opportunity to buy the stock at a reasonable valuation ahead of many elevated growth years. I rate the stock a buy with 15% projected annual returns over the next 5 years.

Visa Stock Price

V typically sports a consistently rising stock price. The past 2 years have seen the stock more or less stagnate, returning only less than 10% from pre-pandemic highs.

Is Visa Stock A Buy Or Sell After Recent Earnings? (NYSE:V) (2)

While it is not immediately clear that its financial results have benefitted that much from the pandemic, that is mainly due to not all of its revenue sources having recovered. In reality, the pandemic greatly accelerated the war on cash, which should provide for smooth sailing for V stock over the next several years.

How Were Visa Stock Earnings

V delivered earnings which comfortably beat consensus estimates on both the top and bottom lines.

Is Visa Stock A Buy Or Sell After Recent Earnings? (NYSE:V) (3)

Wall Street liked earnings so much that the stock bounced 10% amidst what could only be described as a difficult market for tech stocks.

V Stock Key Metrics

We can see below that V has clearly rebounded since pandemic lockdowns, as payment volumes are higher than pre-pandemic levels. Yet the growth may be understated. As we can see below, total payments volume is around 40% higher than 2019 levels but excluding travel the growth may be more.

Is Visa Stock A Buy Or Sell After Recent Earnings? (NYSE:V) (4)

V continues to grow total cards at a 10% clip.

Is Visa Stock A Buy Or Sell After Recent Earnings? (NYSE:V) (5)

These days, V is a well known growth story in the war on cash. Each new generation is more likely to use credit cards, fueling growth for as far as the eye can see. V grew its earnings to $1.81 per share - 24% higher than the same quarter in 2019.

Is Visa Stock A Buy Or Sell After Recent Earnings? (NYSE:V) (6)

Much of that growth was clearly driven from share repurchases, as revenues are only 16% higher than in 2019. As travel inevitably rebounds, I expect V to come out of the pandemic in even stronger shape.

Yet V is also a free cash flow story as it does not have to reinvest excess cash back into the business. In comparison to the $3.9 billion in non-GAAP net income generated in the quarter, V generated $4.1 billion of free cash flow, all of which was returned to shareholders through dividends and share repurchases.

Is Visa Stock A Buy Or Sell After Recent Earnings? (NYSE:V) (7)

I consider V to be a mature growth company in that it has fully embraced rewarding shareholders along the way. Its balance sheet does not have net cash as cash and debt balance out. This may put off some investors who notice the net cash positions of many beaten-down tech stocks, but another way to look at it is that V management is more likely to optimize the balance sheet. This may manifest in the company eventually taking on net leverage to accelerate share repurchases. Assuming a debt to EBITDA ratio of 2x, V can take as much as $32 billion in additional debt, and that number grows as V continues to grow its earnings power.

What Is Visa Stock's Forecast?

V has guided for FY22 to see revenue growth in the “high end of high teens.” We can see consensus earnings estimates below:

Is Visa Stock A Buy Or Sell After Recent Earnings? (NYSE:V) (8)

V looks reasonably valued relative to these estimates, but these estimates may prove conservative. On its conference call, management stated the following:

“As we look ahead, we expect accelerated revenue growth versus pre-COVID over the coming years, driven by our three strategic levers of consumer payments, new flows and value-added services. Many current trends in payments, including A2A, RTP, Buy Now, Pay Later, crypto and wallets are enabling new ways to pay. These represent opportunities for Visa, where we are extraordinarily well positioned to utilize our unique strength and global network to help them grow and scale.”

There’s yet another reason to believe in that aggressive guidance. Physical merchant acceptance locations totaled 61 million at the end of 2019, and stood at 80 million by the end of 2021. Even if overall spending was tempered by COVID lockdowns and overall negative sentiment, the increased number of acceptance locations means that upon a global recovery, V stands to take share from cash at an accelerated pace.

Is V Stock A Buy, Sell, or Hold?

Assuming V can deliver faster revenue growth versus pre-pandemic levels, that would suggest revenue growth in the 13% to 15% range over the next several years. Due to operating leverage, V should grow earnings per share at a materially faster rate - perhaps at a 18% to 20% rate (it would be around 25% assuming full operating leverage). Priced at 32x earnings, the stock might not appear obviously cheap considering the 1.6x price to earnings growth ratio (‘PEG ratio’). However, the clear visibility into forward growth as well as the high shareholder returns warrant the premium multiple. If we assume 18% average earnings growth over the next 5 years, then V will find itself trading at 14x earnings by then. Assuming the stock then trades at 28x earnings, this represents potential annual returns of nearly 15%. I have not incorporated any benefit from share repurchases and dividends, which add a further 3% to the annual return potential. 15% annual returns over many years is attractive considering the lower-risk thesis at V. There remains the risk of competition or disruption, but this has not materialized over the past many decades. Perhaps it is possible that close competitor Mastercard (MA) finds a way to win contracts away from V, which has not been typical historically but is arguably the main risk here. I rate shares a buy as the stock can materially outperform the broader market over the long term.

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Is Visa Stock A Buy Or Sell After Recent Earnings? (NYSE:V) (9)

As a seasoned financial analyst and enthusiast with a comprehensive understanding of the stock market dynamics and investment strategies, I bring forth a wealth of experience and knowledge in evaluating companies and their performance within the market. My insights stem from years of analyzing financial reports, monitoring market trends, and understanding the intricacies of various industries.

Now, delving into the concepts mentioned in the article:

  1. Visa (NYSE:V): Visa is a global payments technology company that facilitates electronic funds transfers throughout the world. It operates the world's largest retail electronic payments network.

  2. Stock Price Performance: The article discusses Visa's stock performance during the pandemic and its subsequent rebound after the latest earnings report. Despite being a clear beneficiary of the pandemic due to the acceleration of the war on cash, its stock price did not immediately reflect this sentiment. However, the recent earnings report indicated accelerated growth relative to pre-pandemic levels, leading to a double-digit jump in the stock price.

  3. Earnings and Financial Metrics: Visa's earnings comfortably beat consensus estimates on both the top and bottom lines. The company has demonstrated strong growth in payment volumes, total cards, and earnings per share (EPS) compared to pre-pandemic levels. The article also highlights Visa's effective utilization of free cash flow for dividends and share repurchases.

  4. Future Forecast and Guidance: Visa's management has provided guidance for accelerated revenue growth in the coming years, driven by strategic initiatives in consumer payments, new flows, and value-added services. The company anticipates leveraging emerging payment trends such as A2A, RTP, Buy Now, Pay Later, crypto, and wallets to fuel growth.

  5. Valuation and Investment Thesis: Despite trading at 32x earnings, Visa is considered reasonably valued considering its growth prospects and shareholder returns. The article suggests potential annual returns of nearly 15% over the next five years, factoring in earnings growth, shareholder returns, and the company's lower-risk profile.

  6. Risk Factors: While Visa faces competition and potential disruption in the market, historical trends indicate its resilience in maintaining market dominance. The main risk highlighted is competition from close competitor Mastercard (MA) winning contracts away from Visa.

In conclusion, Visa presents an attractive investment opportunity due to its robust financial performance, strategic positioning in the payments industry, and promising growth prospects. However, investors should remain vigilant of potential risks and monitor competitive dynamics within the market.

Is Visa Stock A Buy Or Sell After Recent Earnings? (NYSE:V) (2024)


Is Visa Stock A Buy Or Sell After Recent Earnings? (NYSE:V)? ›

Is Visa stock a Buy, Sell or Hold? Visa stock has received a consensus rating of buy. The average rating score is Aa3 and is based on 82 buy ratings, 8 hold ratings, and 1 sell ratings.

Is Visa stock a buy, sell, or hold? ›

Visa Inc's analyst rating consensus is a Strong Buy. This is based on the ratings of 26 Wall Streets Analysts.

What is the earnings prediction for Visa? ›

Projected Revenue Growth

For Visa, the consensus sales estimate for the current quarter of $8.6 billion indicates a year-over-year change of +7.7%. For the current and next fiscal years, $35.68 billion and $38.99 billion estimates indicate +9.3% and +9.3% changes, respectively.

What is the long term outlook for Visa stock? ›

Visa stock price stood at $275.68

According to the latest long-term forecast, Visa price will hit $300 by the end of 2024 and then $350 by the end of 2026. Visa will rise to $400 within the year of 2027, $450 in 2028, $500 in 2029 and $600 in 2032.

What is the projection for VFS stock? ›

Based on short-term price targets offered by four analysts, the average price target for VinFast Auto Ltd. comes to $10.50. The forecasts range from a low of $8.00 to a high of $13.00. The average price target represents an increase of 165.82% from the last closing price of $3.95.

Is Visa stock expected to rise? ›

Visa Stock Forecast

The 26 analysts with 12-month price forecasts for Visa stock have an average target of 295.69, with a low estimate of 252 and a high estimate of 335. The average target predicts an increase of 9.60% from the current stock price of 269.78.

What will visa stock be worth in 5 years? ›

Based on our forecasts, a long-term increase is expected, the "V" stock price prognosis for 2029-04-11 is 339.928 USD. With a 5-year investment, the revenue is expected to be around +24.62%. Your current $100 investment may be up to $124.62 in 2029.

Why is Visa so profitable? ›

Visa is a digital payments company providing transactions between consumers, merchants, banks, and other financial institutions. Data processing operations generate the largest portion of revenue for Visa. Visa's strategy is to grow in consumer payments, new flows, and value-added services.

What will be the share price of Visa in 2025? ›

Long-Term Visa Stock Price Predictions
2025$ 313.1116.09%
2026$ 363.4934.77%
2027$ 421.9856.46%
2028$ 489.8881.63%
2 more rows

Did Visa beat earnings? ›

For the last reported quarter, Visa came out with earnings of $2.41 per share versus the Zacks Consensus Estimate of $2.33 per share, representing a surprise of 3.43%.

Should I buy Visa stock right now? ›

Strong competitive standing

Another compelling reason Visa looks like a no-brainer buy right now is its economic moat. This business possesses traits that support its favorable competitive standing. Network effects are key to Visa's dominance and leading market share in card payments volume.

Does Warren Buffett have Visa stock? ›

Visa and Mastercard Are Phenomenal, but Is This a Better Warren Buffett Stock to Buy Right Now? Among the dozens of holdings in Berkshire Hathaway's massive $365 billion stock portfolio, Visa and Mastercard are tiny positions. Combined, they make up less than 1% of the conglomerate's total assets.

Is Visa undervalued or overvalued? ›

Visa operates in over 200 countries and processes transactions in over 160 currencies. Its systems are capable of processing over 65,000 transactions per second. Over the past twelve months the share price is up 25.06%. Based on the DCF valuation, the stock is overvalued.

Is VFS a buy now? ›

Technical Sentiment. VinFast Auto's (VFS) Moving Averages Convergence Divergence (MACD) indicator is -0.21, suggesting VinFast Auto is a Buy.

Should I buy VFS stock now? ›

The highest analyst price target is $12.00 ,the lowest forecast is $8.00. The average price target represents 101.21% Increase from the current price of $4.97. VinFast Auto's analyst rating consensus is a Moderate Buy.

Why is Visa stock going down? ›

Visa Inc. called out resilient spending as it logged an earnings beat for the latest quarter, but its shares were still coming under pressure in Thursday's after-market action. The culprit? A slowdown in U.S. volumes into January, according to analysts.

What is the price target for Visa stock 2025? ›

Long-Term Visa Stock Price Predictions
2025$ 313.1116.09%
2026$ 363.4934.77%
2027$ 421.9856.46%
2028$ 489.8881.63%
2 more rows

Is JP Morgan a buy sell or hold? ›

Is JPMorgan Chase stock a Buy, Sell or Hold? JPMorgan Chase stock has received a consensus rating of buy. The average rating score is A1 and is based on 70 buy ratings, 12 hold ratings, and 5 sell ratings.

Has Visa ever done a stock split? ›

Visa stock (symbol: V) underwent a total of 1 stock split. The stock split occured on March 19th, 2015.

Who owns the most Visa stock? ›

According to the latest TipRanks data, approximately 19.88% of Visa Inc (V) stock is held by institutional investors. According to the latest TipRanks data, approximately 53.32% of Visa Inc (V) stock is held by retail investors. Vanguard owns the most shares of Visa Inc (V).

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