High Margins, 44% 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 stock is now 44% 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. Recent fiscal Q4 2025 results showed a 10% increase in processed transactions and 12% cross-border volume growth. Value-added services revenue climbed 25%, highlighting expansion in high-margin offerings. Initiatives like the 2026 deployment of the AI-driven Intelligent Commerce platform for streamlined, secure transactions and stablecoin settlement are enhancing the network’s value and supporting pricing power.
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 44% discount vs 1 year ago.
Below is a quick comparison of V fundamentals with S&P medians.
| V | S&P Median | |
|---|---|---|
| Sector | Financials | – |
| Industry | Transaction & Payment Processing Services | – |
| PS Ratio | 10.6 | 3.3 |
| PE Ratio | 21.0 | 24.4 |
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| LTM* Revenue Growth | 11.3% | 6.4% |
| 3Y Average Annual Revenue Growth | 10.9% | 5.7% |
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| LTM* Operating Margin | 66.4% | 18.8% |
| 3Y Average Operating Margin | 66.8% | 18.4% |
| LTM* Op Cash Flow Margin | 57.6% | 20.5% |
| 3Y Average Op Cash Flow Margin | 58.9% | 20.1% |
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| DE Ratio | 6.0% | 19.4% |
*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:
- Greater than $10 Bil in market cap
- High CFO (cash flow from operations) margins or operating margins
- 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:
Notably, a portfolio that was built starting 12/31/2016 with stocks that fulfill 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
Individual stocks can soar or tank but multi asset exposure steadies the ride. A spread out portfolio captures upside while limiting the damage from any one market.
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