Visa logged a -0.5% change during today's morning session, and is now trading at a price of $223.17 per share. The S&P 500 index moved -0.6% and the Nasdaq posted a -0.3% change. V's trading volume is 1,015,315 compared to the stock's average volume of 7,037,685. Let's dive right into a brief fundamental analysis of Visa.
Visa shares moved 11.0% over the last 52 weeks, with a high of $250.58 and a low of $174.6. During this time, the stock outperformed the S&P 500 index by 18.7%. As of January 2022, the company's 50-day average price is $212.0. Visa Inc. operates as a payments technology company worldwide. The large-cap Financial Services company has 26,500 full time employees and is based in San Francisco, CA. Visa has returned a 0.7% dividend yield over the last 12 months.
The Company Has a Steady Stream of Positive Cash Flows with an Upwards Trend:
| 2019-09-30 | 2020-09-30 | 2021-09-30 | 2022-09-30 | |
|---|---|---|---|---|
| Revenue (MM) | $22,977 | $21,846 | $24,105 | $29,310 |
| Revenue Growth | n/a | -4.92% | 10.34% | 21.59% |
| Operating Margins | 67.0% | 64.5% | 65.6% | 67.2% |
| Operating Margins Growth | n/a | -3.73% | 1.71% | 2.44% |
| Net Margins | 52.57% | 49.74% | 51.07% | 51.03% |
| Net Margins Growth | n/a | -5.38% | 2.67% | -0.08% |
| Earnings Per Share | $5.32 | $4.89 | $5.63 | $7.0 |
| EPS Growth | n/a | -8.08% | 15.13% | 24.33% |
| Free Cash Flow (MM) | $12,028 | $9,704 | $14,522 | $17,879 |
| FCF Growth | n/a | -19.32% | 49.65% | 23.12% |
| Capital Expenditures (MM) | -$756 | -$736 | -$705 | -$970 |
| Net Debt / EBITDA | 0.55 | 0.52 | 0.27 | 0.33 |
Visa Is Reasonably Priced:
Compared to the Financial Services sector's average of 13.34, Visa has a trailing twelve month P/E ratio of 31.9 and, according to its EPS guidance of 9.6, an expected P/E ratio of 23.2. Visa's PEG ratio is 1.88 based on its 17.0% annual average growth rate of historical and projected earnings per share. This suggests that the company's shares are overvalued.
Visa's P/B ratio is 13.9 compared to its sector average of 1.95. The company is likely overvalued in terms of its net asset value. The company's shares are currently trading 391.0% above their fair value as expressed by Benjamin Graham's formula:
√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 5.71 * 16.078) = $45.45
Visa's strong cash flow trend and reasonable levels of debt attenuate the company's lofty valuation in terms of earnings and assets.
Visa Is the Subject of Mixed Market Indicators:
37 analysts are following Visa and have set target prices ranging from $185 to $290 per share. On average, they have given the company a rating of buy. At the current price of $223.17, V is trading -12.4% away from its average analyst target price of $254.76 per share, implying an analyst consensus of some upside potential for the stock.
The company has a very low short interest since 1.9% of the company's shares are tied to short positions. Institutions own 98.7% of Visa's shares, while the insider ownership rate stands at 0.14%. The biggest shareholder is the Vanguard Group, Inc. with a 9% stake in the company worth approximately $32,396,544,790.
