V Stock Study (2-17-26)

Posted by Mark on July 31, 2025 at 07:27 | Last modified: February 17, 2026 10:09

I recently did a stock study on Visa Inc. (V, $314.08). Previous studies are here and here.

M* writes:

     > Visa is the largest payment processor in the world. In fiscal 2025, it
     > processed almost $17 trillion in total volume. 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 decade, this large-size company has grown sales and EPS at annualized rates of 10.6% and 16.7%, respectively [FY ends Sep 30]. Lines are mostly up, straight, and parallel except for sales+EPS dip in ’20. Shares outstanding decrease 24.1% (3.0% per year). Value Line (VL) gives an Earnings Predictability score of 95.

Over the past decade, PTPM leads peer and industry averages while increasing from 53.1% to 60.5% (’25) with last-5-year mean of 64.0%. ROE trails peer and industry averages despite increasing from 17.6% to 52.2% (’25) with last-5-year mean of 44.5%. Debt-to-Capital is far less than peer and industry averages despite increasing from 32.5% to 39.9% (’25) with last-5-year mean of 36.7%.

Quick Ratio is 0.73 and Interest Coverage is 42.1 per M* who assigns “Wide” Economic Moat, rates the company “Standard” for Capital Allocation, and gives an A grade for Financial Health (per BetterInvesting® website). VL rates the company A++ for Financial Strength and points out current cash on hand nearly covers long-term debt.

V is #3 on the “Top 40 Stocks Purchased by Investment Clubs” stock screen as of 2/10/26 (nod to the BetterInvesting® Weekly Update email).

With regard to sales:

• YF gives YOY ACE 12.0% and 13.1% [both percentages equal to below] for ’26 and ’27 (based on 34 analysts).
• Zacks gives YOY ACE 11.3% and 10.2% for ’26 and ’27, respectively (13 analysts).
• VL projects 7.8% annualized growth from ’25-’29.
• CFRA projects 2.0% YOY and 11.1% per year for ’26 and ’25-’27, respectively.
• M* offers a 2-year ACE of 10.8% and projects 10.5% per year from ’25-’30 (Equity Report).

I am forecasting below the range at 7.0% per year.

With regard to EPS:

• MarketWatch projects 12.3% and 12.5% per year for ’25-’27 and ’25-’28, respectively (based on 40 analysts).
• Nasdaq.com gives ACE 13.1% and 12.9%/year for ’26-’28 and ’26-’29 [17 / 9 / 1 analyst(s) for ’26 / ’28 / ’29].
• Seeking Alpha projects 4-year annualized growth of 13.1%.
• Finviz gives ACE 5-year annualized growth of 12.6% (8).
• LSEG estimates LTG at 13.1%.
• Argus projects 5-year annualized growth of 20.0%.
• YF gives YOY ACE 12.0% and 13.1% for ’26 and ’27, respectively (38) [something seems amiss as both equal to above].
• Zacks gives YOY ACE 11.9% and 13.3% for ’26 and ’27 (15) along with 5-year annualized growth of 13.6%.
• VL projects 7.7% annualized growth from ’25-’29.
• CFRA projects growth of 12.9% YOY and 13.1% per year for ’26 and ’25-’27 along with 3-year CAGR of 13.0%.
• M* gives long-term growth ACE of 14.2% and projects 13.1% from ’25-’30 in Equity Report.

My 8.0% forecast is near bottom of the long-term-estimate range (mean of eight: 13.4%). Initial value is ’25 EPS of $10.20/share instead of 2026 Q1 EPS $10.66 (TTM).

My Forecast High P/E is 30.0. Over the past 10 years, high P/E ranges from 30.1 in ’24 to 44.9 in ’21 with last-5-year mean of 35.2 and a last-5-year-mean average P/E of 30.4. I am below the range.

My Forecast Low P/E is 23.0. Over the past 10 years, low P/E ranges from 21.1 in ’23 to 31.8 in ’21 with last-5-year mean of 25.6. I am forecasting near bottom of the range (only ’23 is less).

My Low Stock Price Forecast (LSPF) of $234.60 is default based on initial value above. This is 25.3% less than the previous close and 21.5% less than the 52-week low.

Over the past 10 years, Payout Ratio (PR) ranges from 18.7% in ’18 to 24.5% in ’20 with a last-5-year mean of 22.1%. I am forecasting below the range at 18.0%.

These inputs land V in the HOLD zone with a U/D ratio of 1.7. Total Annualized Return (TAR) is 8.0%.

PAR (using Forecast Average—not High—P/E) of 5.5% is less than I seek from a large-size company. If a healthy margin of safety (MOS) anchors this study, then I can proceed based on TAR instead albeit still less than desired.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on 563 studies done in the past 90 days (191 outliers including mine excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 10.3%, 11.9%, 32.4, 24.8, and 21.9% respectively. I am lower across the board. VL [M*] projects a future average annual P/E of 28.0 [17.0, which once again seems unreasonably low] that is [much] less than MS (28.6) and greater [much less] than mine (26.5).

MS high / low EPS are $18.14 / $10.21 versus my $14.99 / $10.20 (per share). My high EPS is less due to a lower growth rate. VL [M*] high EPS of $15.45 [$17.70] is in the middle.

MS LSPF of $257.20 implies a Forecast Low P/E of 25.2 versus the above-stated 24.8. MS LSPF is 1.6% greater than the default $10.21/share * 24.8 = $253.21 that results in more aggressive zoning. MS LSPF is 9.6% greater than mine.

MOS is robust in the study because my inputs are near or below historical/analyst/MS averages/ranges. Also backing this assessment are MS TAR exceeding mine by 5.0% per year and a greater LSPF.

With regard to valuation, PEG is 1.8 and 3.4 per Zacks and my projected P/E: slightly overvalued (2.2 per M* for ’25). Relative Value [(current P/E) / 5-year-mean average P/E] is fair at 0.97. “Quick and Dirty DCF” has stock overvalued by 7.1%.

Per U/D, V is a BUY under ~$288/share. BetterInvesting® TAR criterion would be met [449.7 / ((14.27 / 100 ) +1 ) ^ 5]
~ $231 given a forecast high price ~$450.

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