High Margins, 43% Discount: Buy Visa Stock Now

Visa (V) stock might be a good buy now. Why? Because you get high margins – reflective of pricing power and cash generation capacity – for a discounted price. Companies like this generate consistent, predictable profits and cash flows, which reduce risk and allow capital to be reinvested. The market tends to reward that.

What Is Happening With V

V may be down -6.5% so far this year, but the silver lining is that it is now 43% cheaper based on its P/S (Price-to-Sales) ratio compared to 1 year ago.

The stock may not reflect it yet, but here is what’s going well for the company. Q4 2025 saw data processing revenue surge 17%, coupled with a 12% increase in higher-margin cross-border volume, driven by resilient consumer spending. Processed transactions grew 10%, indicating expanding network utility. Value-added services revenue climbed 25% with new partnerships and technology investments like next-gen VisaNet enhancing offerings. The company forecasts low double-digit net revenue growth for FY2026, with global events like the Olympics providing tailwinds.

V Has Strong Fundamentals

• Recent Profitability: Nearly 57.6% operating cash flow margin and 66.4% operating margin LTM.
• Long-Term Profitability: About 58.9% operating cash flow margin and 66.8% operating margin last 3-year average.
• Revenue Growth: Visa saw growth of 11.3% LTM and 10.9% last 3-year average, but this is not a growth story
• Available At Discount: At P/S multiple of 10.6, V stock is available at a 43% discount vs 1 year ago.

Below is a quick comparison of V fundamentals with S&P medians.

*LTM: Last Twelve Months

Don’t Expect A Slam Dunk, Though

While V stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. Stock V isn’t immune to rough patches either. It fell about 52% during the Global Financial Crisis, took a 36% hit in the Covid downturn, and dropped nearly 29% in the inflation shock of 2022. Even the 2018 correction pushed it down nearly 19%. So, while it might seem solid on paper, these dips show it can still suffer along with the broader market when things get shaky. But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read V Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

If you want more details, read Buy or Sell V Stock.

How We Arrived At V Stock

V piqued our interest because it meets the following criteria:

1. Greater than $10 Bil in market cap
2. High CFO (cash flow from operations) margins or operating margins
3. Meaningfully declined in valuation over the past 1 year

But if V doesn’t look good enough to you, here are other stocks that also check all these boxes:

1. T-Mobile US (TMUS)
2. Intuit (INTU)
3. ServiceNow (NOW)

Notably, a portfolio that was built starting 12/31/2016 with stocks that fulfil the criteria above would have performed as follows:

• Average 12-month forward returns of nearly 19%
• 12-month win rate (percentage of picks returning positive) of about 72%

A Multi Asset Portfolio Beats Picking Stocks Alone

Stocks soar and sink but bonds commodities and other assets balance the ride. A multi asset portfolio keeps returns steadier and reduces single market risk.

The asset allocation framework of Trefis’ Boston-based, wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner’ strategy now includes Trefis High Quality Portfolio, which has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices