Visa operates as a retail electronic payments network worldwide. The company facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. Visa was founded in 1958 and is based in San Francisco, California.
V Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Visa Inc. To summarize, we found that Visa Inc ranked in the 24th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. The most interesting components of our discounted cash flow analysis for Visa Inc ended up being:
The company has produced more trailing twelve month cash flow than 96.64% of its sector Financial Services.
The business' balance sheet reveals debt to be 4% of the company's capital (with equity being the remaining amount). Approximately only 11.33% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
V's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 50.12% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Financial Services that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as V, try NICK, VOYA, FDS, WTRE, and HLNE.
Payment processing giant Visa (NYSE: V) has grown into a mega cap stock in just a little over a decade as a publicly traded company, with a market capitalization of about $420 billion as of this writing. Since going public in 2008, Visa's stock price has increased by nearly 1,300% thanks to the gradual transition away from cash payments around the world, the surge in cross-border payment transactions, and smart expense management by the company. Another 140% gain would catapult Visa into the trillion-dollar club, and if the company's past performance is any indicator, such a move would certainly be possible.
E-commerce has reached new heights around the world, as more consumers are going online to make secure, touch-free purchases across various merchants and platforms. Now, it’s more important than ever that the online checkout experience is seamless and consistent across all types of digital channels and cards. Today, American Express, Discover, Mastercard and Visa announced they are each beginning technical preparations for global expansion of the Click to Pay online checkout – based on the EMV® Secure Remote Commerce industry standard – in additional geographies including Australia, Brazil, Canada, Hong Kong, Ireland, Kuwait, Malaysia, Mexico, New Zealand, Qatar, Saudi Arabia, Singapore, United Arab Emirates and the United Kingdom, with others to follow.