Visa’s (V) top and bottom line witnessed more than 20% year-over-year growth in the last fiscal year despite the macro uncertainties. The stock has delivered steady returns over the past months. Moreover, Wall Street analysts see a more than 12% upside potential in the stock. So, let’s find out whether you should invest in the stock now….
Finance giant Visa Inc. (V) gained 20.4% over the past three months despite a downward trending market. Over the past six months, the stock has gained 6.2% to close the last trading session at $223.00.
Despite the macro uncertainties and geopolitical turmoil, the company delivered steady revenue growth in the fiscal year 2022, supported by strength in consumer payments, resilience in e-commerce, and ongoing recovery in cross-border travel.
Moreover, the company has a large market share as it connects consumers, businesses, banks, and governments in more than 200 countries and territories.
“As we look ahead, while some short-term uncertainty exists, we remain confident in Visa’s long-term growth trajectory across consumer payments, new flows and value added services,” Alfred F. Kelly, Jr., Chairman, and Chief Executive Officer, Visa Inc., said.
In addition, the growth of the digital economy and digital payments is boosting V’s growth trajectory. The global digital payment market is expected to reach $228.37 billion by 2028 at a CAGR of 14.3%.
Here is what could shape V’s performance in the near term:
V’s net revenues came in at $29.31 billion for the year ended September 30, 2022, up 21.6% year-over-year. Its non-GAAP net income increased 24% year-over-year to $16.03 billion, while its non-GAAP EPS came in at $7.50, up 26.9% year-over-year.
Favorable Analyst Expectations
Analysts expect V’s revenue to increase 8.7% year-over-year to $31.86 billion in 2023 and 11.8% year-over-year to $35.61 billion in 2024. Its EPS is expected to increase 10.3% year-over-year to $8.27 and 15.8% year-over-year to $9.58 in 2024.
Moreover, its EPS is expected to rise 14.9% per annum for the next five years. The stock surpassed EPS estimates in all four trailing quarters.
V’s trailing-12-month gross profit margin of 97.47% is 96.8% higher than the industry average of 49.53%. Its trailing-12-month EBITDA margin of 70.35% is 502.9% higher than the industry average of 11.67%. Moreover, its 51.03% trailing-12-month net income margin is substantially higher than the industry average of 3.22%.
Furthermore, its trailing-12-month ROCE, ROTC, and ROTA of 43.18%, 20.93%, and 17.49% compared with the industry averages of 4.75%, 3.21%, and 1.52%, respectively.
POWR Ratings Reflect Promising Outlook
V has an overall rating of B, which equates to a Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
V has an A grade for Quality, consistent with its higher-than-industry profitability margins.
It has a B grade for Stability, in sync with its beta of 0.94.
In the 48-stock Consumer Financial Services industry, V is ranked #6.
Click here for the additional POWR Ratings for V (Growth, Value, Momentum, and Sentiment).
View all the top stocks in the Consumer Financial Services industry here.
V witnessed stable growth despite the macro headwinds. Moreover, Wall Street analysts expect the stock to hit $250.58 soon, indicating a potential upside of 12.3%. Given the stock’s robust profitability and favorable outlook, I think V might be an ideal buy in 2023.
How Does Visa Inc. (V) Stack Up Against its Peers?
While V has an overall POWR Rating of B, one might consider looking at its industry peers, MainStreet Bancshares, Inc. (MNSB), EZCORP, Inc. (EZPW), and AssetMark Financial Holdings, Inc. (AMK), which have an overall B (Buy) rating.
V shares . Year-to-date, V has gained 7.34%, versus a 4.01% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
Your Company’s Responsible Guide to Staying Profitable in a Recession
Opinions expressed by Entrepreneur contributors are their own.
The recent trend of easy money and exorbitant valuations has skidded to a halt amid recent economic volatility. Understandably, many companies rode that wave as long as they could, but in doing so many prioritized growth over sustainability and sound leadership. Layoffs continue to ripple through the tech ecosystem, so employees both in this sector and elsewhere are feeling the consequences.
Having to let go of staff members is all but unavoidable in a company’s lifecycle, but there is always more that can be done to keep businesses afloat while preserving morale. Strategies can include responsible budgetary decision-making, thoughtful and prudent responses to external pressures and transparent dialogue with employees, to name a few. Such actions can help companies remain healthy, productive and profitable, even as they navigate challenging waters.
This is What You Need in Your 5-Year Marketing Plan
Opinions expressed by Entrepreneur contributors are their own.
We’ve all heard the interview question, “Where do you see yourself in five years?” Marketers routinely take that question and apply it to their marketing strategies. They figure out what they want to achieve and then develop actionable steps to get there. Keep in mind, these plans aren’t designed to be all-encompassing. They serve as a guidebook for different scenarios while getting the team thinking about what they’d like to accomplish long-term.
Your five-year plan is a way to build an overarching metric for how you’re doing — or how you plan to do over the next half-decade. There are many things to consider when building your plan — here are a few to look at carefully:
The 3 key buckets
A successful five-year marketing plan should fixate on three main questions:
- What assumptions can you make about the next five years within your company?
- What goals do you want to achieve?
- What are the metrics you’ll use to measure those goals?
Assumptions are what you think won’t change in the business over the next five years. For example, you might assume that you will continue using particular vendors or that packaging costs will remain stable. From there, you can determine your goals — like boosting sales by 50% or converting 10,000 new customers. The metrics that measure your progress might be units sold or your company’s market share. It’s essential to include both readily-accessible metrics — such as website views — and brand metrics that might be a bit harder to come by, such as the associations your customers have made with your products or company.
Importantly, there’s no “right” or “wrong” when it comes to answering these questions. Every business has its own vision, resources and position, which all influence its marketing strategy. The aim is to develop a plan that will produce the most desirable outcome for you, rather than worrying about what other businesses have the capacity to do.
Related: Use These 5 Steps to Create a Marketing Plan
Narrowing your focus
Just like consumer preferences, marketing tactics are constantly shifting. Social media demonstrates this well. Because social media platforms have skyrocketed over the past two decades, marketers no longer rely solely on traditional platforms such as print or television ads. And even within social media, things aren’t constant. TikTok has become one of the fastest-growing platforms, quickly overtaking Facebook.
With so many options, your marketing plan must keep a narrow focus. For some companies, TikTok doesn’t matter. They can’t yet measure the return they’re getting from the platform, so this isn’t exactly a feasible opportunity. Don’t be tempted to try everything or be everywhere. It’s a matter of isolating what you practically can use to give you the insights that will help you.
Two questions will help focus your strategy:
- How do your goals compare to last year?
- What are you striving for (e.g., enhancing the brand vs. increasing brand awareness)?
How you answer those questions will help you identify where and how to focus your efforts so you don’t get lost in a bunch of small, irrelevant tactics.
Using your budget
Most people think of budgets as being stable or hard data — but almost all companies work with unknowns. In reality, the best they can do is come up with an educated guess that seems to make sense – a ballpark range. Because nobody can plan with certainty for every scenario — and because it’s so easy to become overwhelmed with an infinite range of outcomes — it’s advisable to lean on a few key financial assumptions and build a strategy around those.
Once you have a budget figure to work with, create high and low projections for everything you want to do. Let’s say the aim is to get to 50% brand awareness. What would your plan look like if you exceeded that and got to 75%? Alternatively, what would you do if awareness went down to 25%? Creating these high and low projections will let you design a more flexible approach and avoid being caught too off guard.
As you come up with your main scenarios and high-low projections, think about the key internal drivers you’ll need to address next year. Consider the risks, and assess whether you’ll have the data, technology and skills to develop and maintain what you expect to put forward. Keep in mind that it’s more important to pivot when issues come up than to predict what’s going to happen accurately.
Related: 4 Tips for Developing a Marketing Plan That Will Actually Grow Your Business
Paint flexibly within your broad strokes
A five-year marketing plan paints a broad, long-term picture of how you’ll communicate with your audience while giving details about your projected products or services. It includes assumptions and factors that aren’t necessarily static, so you have to approach it with a grain of salt and be ready to shift gears if the plan doesn’t work.
Even so, if you stick to three key buckets (assumptions, goals and metrics), keep your tactical focus narrow and incorporate multiple projections in your budget, you should end up with a strategy that blends the data and flexibility needed to strive in a changing world. Because annual marketing plans need to connect to your long-term marketing vision, let the annual marketing meetings serve as check-in points to keep your longer-term marketing plan relevant and viable.
Lauren Sánchez Is Heading to Space on a Girls Trip
Sorry, Jeff — this one is for the girls.
Jeff Bezos’ girlfriend, Lauren Sánchez, said in a new interview with the Wall Street Journal that she planned to take an all-female trip to space with the Amazon founder’s space manufacturing company, Blue Origin.
Five women will join her on the journey.
“It’s going to be women who are making a difference in the world and who are impactful and have a message to send,” she told the outlet.
The mission is set for early 2024, and the passengers’ names will be announced at a later date.
The WSJ’s report was Sánchez’s first solo interview, the outlet noted, since her relationship with Bezos went public in 2019, shortly after his divorce announcement from now ex-wife, MacKenzie Scott.
The interview also talks about Sánchez’s relationship with Bezos and the business advice he’s given her (keeping meetings under an hour, speaking last as a boss).
Sánchez is a former broadcast journalist and a helicopter pilot who founded her own filming company Black Ops Aviation, per Insider.
“Right now, I’m immersing myself in philanthropy and strategic giving,” she told the outlet. She also has a new production company, Adventure & Fellowship.
Bezos and Sánchez also work together on picking the winner for the Bezos Award for Courage & Civility, which was awarded to Dolly Parton in 2022, giving her $100 million to dole out to charities as she pleased.
But don’t expect Bezos to crash the girls’ trip. “He’ll be cheering us all on from the sidelines,” Sánchez said, adding that Bezos is “excited to make this happen with all of these women… He’s very encouraging and excited, and he’s thrilled we’re putting this group together.”
Sánchez’s nonprofit work includes This Is About Humanity, which helps give supplies to kids separated from their parents at the U.S.-Mexico border, supporting the Bezos Earth Fund, which fights climate change, and working with the Bezos Academy, a system of free Montessori schools.
Bezos told CNN in an exclusive that aired in mid-November that, like many other billionaires have pledged to do, he would give away most of his money.
Ex-wife Scott, meanwhile, has donated over $14 billion since 2019, much of it coming from the settlement with Bezos.
Bezos has always planned on giving his money away, Sánchez told the outlet.
“Jeff has always told me since I’ve known him that he’s going to give the majority of his money to philanthropy,” she said.
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