Assessing Visa’s Value After Digital Payment Expansion and Recent Price Dip

Thinking about adding Visa to your portfolio, but not sure if the current price offers real value? You are not alone. Many investors are taking a closer look at whether recent moves put the stock in bargain territory. Visa's stock price has had some ups and downs lately, sliding 1.4% in the past week and 4.4% over the last month. However, it is still up 6.9% year-to-date and 9.9% over the past year, highlighting both its resilience and volatility. Recent headlines have featured Visa's continued expansion into digital payments and strategic partnerships with fintech firms. This has added fuel to speculation around its growth potential and competitive positioning. Markets are clearly reacting to these developments as investors reassess the risks and opportunities associated with its evolving business model. On valuation, Visa earns a 1 out of 6 on our undervalued checks, which may signal that the current price does not reflect a bargain at this time. We are about to dig into the details of how Visa is currently valued, along with a fresh perspective on valuation that could change how you look at the company.

Visa scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Visa Excess Returns Analysis

The Excess Returns valuation model aims to determine how much value a company creates above its cost of equity by reinvesting its profits. It focuses on the return Visa generates on its invested capital, offering a clear measure of shareholder value creation beyond simple earnings or free cash flow figures.

For Visa, the key metrics are compelling. The company's Book Value stands at $20.04 per share, with Stable Earnings Per Share estimated at $16.31. These earnings estimates are based on weighted future Return on Equity projections from 14 analysts. With a calculated Cost of Equity of $1.68 per share, Visa is delivering Excess Returns of $14.63 per share. The company's average Return on Equity is an impressive 71.94%, indicating Visa's ability to generate significant profits on shareholder investment. Furthermore, its Stable Book Value is projected at $22.67 per share, drawing from consensus estimates by nine analysts.

Based on these metrics, the Excess Returns model calculates Visa’s intrinsic value at $374.63 per share compared to its current market price. This suggests the stock is trading at a 10.3% discount, pointing to genuine value for long-term investors relative to its future return-generating potential.

Result: UNDERVALUED

Our Excess Returns analysis suggests Visa is undervalued by 10.3%. Track this in your watchlist or portfolio, or discover 869 more undervalued stocks based on cash flows.

Story Continues

V Discounted Cash Flow as at Nov 2025

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Visa.

Approach 2: Visa Price vs Earnings

For established and consistently profitable companies like Visa, the Price-to-Earnings (PE) ratio serves as a reliable gauge of valuation. The PE multiple tells investors how much they are paying for each dollar of current earnings, making it particularly meaningful when earnings are strong and growing.

A "normal" or fair PE ratio varies based on a company's expected earnings growth and perceived risks. Fast-growing or lower-risk businesses tend to trade at higher multiples, while slower-growing or riskier firms are typically valued at lower PE ratios.

Visa is currently trading at a PE multiple of 32.1x. This is markedly higher than both the Diversified Financial industry average of 14.2x and the peer group average of 17.4x. At first glance, this elevated multiple might suggest Visa is expensive compared to its sector and competitors.

However, Simply Wall St's proprietary "Fair Ratio" for Visa is 20.8x. This figure incorporates not just sector norms and peer levels but also factors in Visa's superior earnings growth, strong profit margins, its market cap, and unique risk profile. By considering these comprehensive factors, the Fair Ratio provides a more nuanced and accurate view of value than simple industry or peer comparisons.

Visa's current PE of 32.1x is well above its calculated Fair Ratio of 20.8x. This suggests that, despite its strengths, the stock may be priced ahead of its underlying fundamentals at this time.

Result: OVERVALUEDNYSE:V PE Ratio as at Nov 2025

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1396 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Visa Narrative

Earlier we mentioned that there's an even better way to understand valuation, so let's introduce you to Narratives: a simple, powerful tool that lets you connect your unique perspective on a business with the actual numbers behind its valuation.

A Narrative is more than just a story; it is your reason for believing in a company, linking real-world trends and company strategies directly to forecasts for future revenue, earnings, profit margins, and ultimately, to a fair value estimate.

On Simply Wall St’s platform, Narratives are easily accessible within the Community page, where millions of investors share and review perspectives that unite financial forecasts with personal insights.

By comparing your Narrative-based Fair Value against the current Price, you can make informed decisions about when to buy or sell, with your view quickly updating whenever new information, like earnings or news, emerges.

For example, some investors see Visa’s global expansion in e-commerce and cross-border payments justifying a fair value as high as $430.00, while others, worried about regulatory and tech disruption, set their targets as low as $305.00. This shows how diverse Narratives lead to different investment conclusions.

Do you think there's more to the story for Visa? Head over to our Community to see what others are saying!NYSE:V Community Fair Values as at Nov 2025

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include V.

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