V - Embedded Expectations Analysis - 2021 12 17
Visa Inc. (V) currently trades above corporate, but below recent averages relative to Uniform earnings, with a 27.6x Uniform P/E (Fwd. V/E').At these levels, markets are pricing in expectations for Uniform ROA to expand from 40% to 58%, accompanied by 7% Uniform asset growth.
Given the firm's potential in the digital payments market, there is fundamental potential for stronger-than-priced-in performance.
If the company can execute its strategy in the digital payments space, it could drive Uniform ROA to 80% with 15% Uniform asset growth going forward, which would imply a stock price closer to $409, representing significant equity upside for the firm.
Moreover, the firm's most recent earnings call suggests management may have concerns about their growth and their products and services.
Visa is engaged in digital payments. The company facilitates payments between consumers and businesses. The company is focused on its proprietary network, VisaNet, to provide products and services. The company provides a portfolio of business payment solutions, including small business, corporate (travel) cards, purchasing cards, virtual cards/digital credentials, non-card cross-border business-to-business payment options and disbursement accounts, covering various main industry segments around the world. The company also provides several capabilities and services, including fraud prevention and security, processing, loyalty, merchant and digital solutions, consulting and data solutions.
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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
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