Key Takeaways From Visa Q4 Earnings

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Visa

In continuation with a strong performance over the first three quarters, Visa (NYSE: V) reported another impressive quarter to end fiscal 2017 on a high note. The U.S.-based payments company reported a 14.9% increase in revenue, net of client incentives, compared to the same quarter in fiscal year 2016. The number of processed transactions on Visa’s network increased by 13% over the same period. Shifts in exchange rates over the recent period have positively benefited the bottom line, excluding the impact of which net income grew by 11% to $2.1 billion.

Visa is in an extremely strong position operationally. It has huge scale, as its credit and debit cards are accepted almost universally, it has a large number of co-branding partners, and its cards in circulation and volume of transactions processed far exceed those of its rivals. The company managed to grow its revenues in Q3 by growing client incentives 36% and keeping its operating expenses in line year over year. Moreover, the company has been consistently improving its operating margins by keeping expenses in check, in addition to the revenue growth. Its strong market position allows Visa a lot of leeway to give up some short-term profits for the consolidation of its market position in the medium to long-term.

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Our price estimate for Visa is around 20% below the current market price.

Please refer to our complete analysis for Visa

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