Visa Inc. (V) | Investment Case

1. Company Snapshot

1.a. 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.

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1.b. Last Insights on V

Visa Inc.'s recent performance has been negatively impacted by competitive and regulatory headwinds. An investigation into Visa's compliance with federal antitrust laws and internal controls has been launched by Bragar Eagel & Squire, P.C. on behalf of long-term stockholders. Additionally, some institutional investors have reduced their stakes in the company, including Altman Advisors Inc., which sold 223 shares, and ANB Bank, which sold 1,236 shares. The company's Q4 earnings report is expected to provide insight into consumer spending habits.

1.c. Company Highlights

Last Price	333.84
Change Percentage	3.73%
Open	324.83
Previous Close	321.83
Market Cap ( Millions)	643657
Volume	8330077
Year High	375.51
Year Low	299
M A 50	337.57
M A 200	344.91

FCF Yield	3.56%
Dividend Yield	0.73%
ROE	54.22%
Debt / Equity	54.61%
Net Debt / EBIDTA	24.51%
Price To Book	16.72
Price Earnings Ratio	31.18
Price To FCF	28.07
Price To sales	15.55
EV / EBITDA	24.81

2. Visa's Strong Q1 Earnings Driven by Growth in Payments Volume and Value-Added Services

Visa Inc.'s fiscal first quarter 2026 earnings call highlighted strong financial results, with net revenue up 15% year over year to $10.9 billion and EPS up 15% to $3.17, beating analyst estimates of $3.14. The company's payments volume grew 8% to nearly $4 trillion, and processed transactions grew 9% to 69 billion. Revenue components saw service revenue grow 13%, data processing revenue up 17%, and international transaction revenue up 6%. Client incentives grew 12%, lower than expected due to one-time true downs.

Publication Date: Feb -01

📋 Highlights

Growth Engines Performance

The company's three growth engines showed consumer payments revenue driven by strong payments volume, cross-border volume, and processed transaction growth. Commercial and money movement solutions revenue grew 20% year-over-year in constant dollars, driven by commercial solutions business. Value-added services revenue grew 28% to $3.2 billion, driven by executing strategy and investing in the business.

Segment Performance

Visa's Q1 total international payments volume rose 9% year-over-year in constant dollars, consistent with previous quarters. Cross-border volume, excluding intra-Europe transactions, grew 11%, with e-commerce up 12% and travel-related volume up 10%. The company's international payment volume grew 9%, in line with the previous quarter, with stability across regions.

Valuation and Outlook

Given the current valuation metrics, with a P/E Ratio of 30.06 and P/S Ratio of 14.99, the market seems to have priced in a significant growth trajectory for Visa. Analysts estimate next year's revenue growth at 10.4%. The company's guidance for the full year expects adjusted net revenue growth in the low double digits, with adjusted EPS growth in the low double digits. With a strong track record of delivering on growth initiatives, Visa is well-positioned to continue its upward trajectory.

Tokenization and Future Growth

As Ryan McInerney mentioned, getting to 17.5 billion tokens and 50%+ of transactions being tokenized was a multiyear journey requiring client-by-client engagement. The dialogue with issuers, merchants, and acquirers has been positive, focusing on sales uplift and fraud reduction. Visa is continuing this journey, engaging with clients on case studies, and targeting merchants with large stored credentials and high guest checkout rates.

3. NewsRoom

Why Visa Stock Is Up Today

Feb -02

Source: fool.com

U.S. Bank Business Shield™ Visa® Card Offers Intro 0% APR for up to 18 Billing Cycles

Feb -02

Source: businesswire.com

1 Prediction for Visa in 2026

Feb -02

Source: fool.com

Visa vs. Mastercard: Which Will Make You Richer?

Feb -02

Source: fool.com

Visa Inc. $V Shares Acquired by Guerra Advisors Inc

Feb -02

Source: defenseworld.net

Jones Financial Companies Lllp Has $215.14 Million Stock Position in Visa Inc. $V

Feb -02

Source: defenseworld.net

AGF Management Ltd. Purchases 81,418 Shares of Visa Inc. $V

Feb -02

Source: defenseworld.net

Commonwealth Retirement Investments LLC Has $5.94 Million Stake in Visa Inc. $V

Feb -02

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.50%)

6. Segments

Payment Services

Expected Growth: 11.0%

The expected growth rate for Payment Services is slightly higher than the global revenue growth hypothesis of 10.5%, driven by the increasing adoption of digital payments, particularly in emerging markets, and the continued shift away from cash and checks. As consumers and businesses increasingly rely on digital payment solutions, Visa's Payment Services segment is poised to benefit, driving revenue growth above the global average.

7. Detailed Products

VisaNet

A payment processing network that enables secure, reliable, and efficient transactions between merchants, acquirers, and issuers.

Visa Direct

A push payments platform that enables fast, convenient, and secure transactions between businesses and individuals.

Visa Token Service

A tokenization platform that replaces sensitive payment information with a unique token, enhancing security and convenience.

Visa Checkout

A digital payment service that simplifies online checkout, reducing friction and increasing conversion rates.

Visa Business Solutions

A suite of payment solutions designed to help businesses optimize their payment processes, reduce costs, and improve efficiency.

Visa Analytics Platform

A data analytics platform that provides insights and intelligence to help businesses optimize their payment strategies.

Visa Risk Manager

A risk management platform that helps prevent fraud, reduce risk, and improve the overall payment experience.

8. Visa Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Visa's business model is highly dependent on its network effects, making it difficult for substitutes to emerge. Additionally, the company's strong brand recognition and partnerships with financial institutions further reduce the threat of substitutes.

Bargaining Power Of Customers

While customers have some bargaining power due to the availability of alternative payment methods, Visa's strong brand and widespread acceptance reduce the bargaining power of customers. Furthermore, the company's partnerships with financial institutions and merchants also mitigate this threat.

Bargaining Power Of Suppliers

Visa's suppliers, primarily financial institutions and merchants, have limited bargaining power due to the company's dominant market position and strong brand recognition. This reduces the threat of suppliers negotiating better terms or switching to alternative payment processors.

Threat Of New Entrants

While new entrants may emerge in the payment processing industry, Visa's strong brand, network effects, and partnerships with financial institutions and merchants create significant barriers to entry. However, the rise of fintech companies and digital payment methods poses a moderate threat to Visa's market share.

Intensity Of Rivalry

The payment processing industry is highly competitive, with companies like Mastercard, American Express, and PayPal posing significant threats to Visa's market share. The intensity of rivalry is further increased by the emergence of fintech companies and digital payment methods.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	34.69%
Debt Cost	3.95%
Equity Weight	65.31%
Equity Cost	8.68%
WACC	7.04%
Leverage	53.10%

11. Quality Control: Visa Inc. passed 7 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Synchrony

A-Score: 6.8/10

Value: 7.8

Growth: 7.8

Quality: 7.6

Yield: 4.0

Momentum: 7.0

Volatility: 6.7

1-Year Total Return ->

Discover

A-Score: 6.2/10

Value: 6.6

Growth: 7.8

Quality: 7.8

Yield: 3.0

Momentum: 7.5

Volatility: 4.3

1-Year Total Return ->

Visa

A-Score: 5.9/10

Value: 0.8

Growth: 7.8

Quality: 8.8

Yield: 1.0

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

Amex

A-Score: 5.8/10

Value: 3.0

Growth: 6.3

Quality: 6.9

Yield: 2.0

Momentum: 8.0

Volatility: 8.3

1-Year Total Return ->

Capital One

A-Score: 5.5/10

Value: 4.1

Growth: 6.3

Quality: 5.4

Yield: 3.0

Momentum: 7.0

Volatility: 7.0

1-Year Total Return ->

PayPal

A-Score: 4.9/10

Value: 6.2

Growth: 7.6

Quality: 7.2

Yield: 0.0

Momentum: 2.5

Volatility: 6.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

6.54%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.04%

Visa Inc. - US92826C8394

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on V

1.c. Company Highlights

Expensive

Better Quality

Higher Growth

Earnings Beats

Revenues Beats

Less Volatile

Lower Yield

2. Visa's Strong Q1 Earnings Driven by Growth in Payments Volume and Value-Added Services

Growth Engines Performance

Segment Performance

Valuation and Outlook

Tokenization and Future Growth

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.50%)

6. Segments

Payment Services

Expected Growth: 11.0%

7. Detailed Products

VisaNet

Visa Direct

Visa Token Service

Visa Checkout

Visa Business Solutions

Visa Analytics Platform

Visa Risk Manager

8. Visa Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Visa Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

333.84$

Current Price

333.84$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA