Visa (V): fair value

Fair-value band

The normal range for this name runs from $353 (cheap) to $428 (expensive); it is now priced at $408.

That is 0.7σ above this name's own normal premium.

Is Visa undervalued?

Fair, relative to its own history. Visa trades at $408, 12% above the fair value this model estimates, but it has habitually traded 7% above fair value, and today's gap is 0.7σ above that norm, within the range it normally trades in, so the verdict is Fair: priced normally for itself, not necessarily fairly valued.

Diligence checklist

6 pass · 2 fail · 3 no data

• PASSCash actually collected from profit, last 12 months: 111%XBRL · Visa gets $1.11 of real cash for every $1 of reported profit which means profits are real and not just numbers on paper. That's a good sign.
• PASSGap between paper profit and real cash: +0.0%XBRL · Visa's "profit on paper" and "cash in the bank" gap is small enough to pass.
• PASSDebt compared to one year of cash earnings: 0.41xXBRL · Visa could pay off everything it owes, net of the cash it holds, with 0.41 of a single year's earnings. My limit for a name I would buy is three years, so debt is not a risk here.
• PASSHow much more it earns on capital than that capital costs: +27.75ppXBRL · Return on capital is far higher than what that capital costs, so every dollar Visa puts to work turns into much more than a dollar of value. A +28 point gap is wide: reinvesting is genuinely worth doing here, which is what makes growth valuable rather than merely expensive. The gap is wider than it was at the start of the window.
• FAILStock sold by executives and directors on the open market, last 6 months: $31.0MEDGAR (dealbreaker) · Mahon Tullier Kelly sold $20.9M of stock in the last 6 months, outside any pre-planned selling schedule, and $31.0M went out that way in total. My rulebook says more than $5 million of this kind of selling is disqualifying for a "long" position (buying the stock). The full list of open-market sellers: Mahon Tullier Kelly $20.9M, Taneja Rajat $6.7M, Suh Chris $3.5M. A further $30.1M went out under pre-planned 10b5-1 schedules, which I don't count: those sales are set up months ahead and say nothing about what management thinks today. Options being exercised, and shares held back to cover the tax on them, are not sales and I don't count them either. filing ↗
• FAILHow long the CEO has run this company: 3.7 yearsTEXT · Visa's chief executive took the job on February 1, 2023, 3.7 years ago. I want a full cycle at the company, which I take as 5 years, before a management record tells me anything: a short run has not yet been tested by a bad year. filing ↗
• N/AProfit margin held up during the last sales slump: n/aXBRL · There's no revenue downturn in Visa's filed record, or gross profit isn't tagged, so this test has nothing to measure. It needs a bad patch to look at: without one, whether customers would stay through a price rise is untested rather than proven.
• PASSNormal profit margin across a full business cycle: FCF margin 48.7% vs 57.3% medianXBRL · Visa's current cash margin (48.7%) sits a little below its long-run average (57.3%). My valuation grows the average, so a soft patch doesn't get written into the value as if it were permanent. Across the window the margin ran between 48.7% in June 2026 and 61.0% in September 2022.
• N/AHow much of the stock trades on an average day: $2,181MMARKET · Visa trades so much volume that this basically isn't a concern. There's no pass or fail here because the answer depends on how big a position I'd actually want to take.
• N/AShare of revenue from its single biggest customer: not establishedTEXT · I fetched and read Visa's November 6, 2025 10-K but found no sentence about customer concentration. That isn't the same as the filing saying there is none: it may simply be worded in a way my search doesn't catch. Read Item 1 and the concentration-of-risk note yourself before trusting this row. filing ↗
• PASSWhether the company switched auditors in the last 2 years: noneEDGAR · Companies sometimes switch accounting auditors right before something bad is uncovered which can be a warning sign. Visa hasn't changed auditors in the last 2 years, so there's no such red flag here.