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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Visa Inc. (XNYS:V) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
V
Name:
VISA INC. (XNYS:V)
Sector:
4.06B
Industry:
Credit Services
CEO:
Mr. Alfred Kelly
Total Employees:
21,500
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -61.62% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF VISA INC.(V) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CREDIT SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
197.76
One Month Price Target:
$198.76
Six Month Price Target :
$203.75
Likely Price in One Year's Time:
Ticker:
$209.74
Likely Trading Range Today Under (Normal Volatility)
$197.11
Price Upper limit ($) :
$198.54
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$189.17
This week:
$178.54
This month :
$159.33
Other Primary facts
Market Cap:
410.95B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
2.07B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.84%
-13.55%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$237.64
$219.36
$157.88
$176.16
Medium risk (<10%) entry points
Buy Call
Sell Call
$213.41
Buy Put:
Sell Put:
$209.50
$182.06
$186.02
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
V
Sharpe Ratio:
1.21%
Comparison:
V, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -34.69% lower than the industry
& is -46.73% lower than the market/S&P 500 average
Average Returns/Yield of
V
Daily returns:
0.03%
Weekly returns:
0.17%
Monthly returns:
0.69%
Yearly returns:
19.06%
Comparison of returns:
Average annual returns/yield (last 3 years) is -56.26% below industry average
Classification:
V, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.75
Statistical test of Returns:
V has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.13%
Weekly Volatility:
4.77%
Monthly Volatility:
9.54%
Yearly Volatility:
33.04%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.93%
Volatility in last five trading days has been -56.28% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.35%
Weekly VaR:
-9.72%
Monthly VaR:
-19.43%
How Much Can the price of
V
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-17%
Worst case (decline):
-67.32%
This translates to price declining to:
$164.56
This translates to price declining to:
$64.62
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
V is a 37.17% riskier investment compared to the market/S&P 500 & is 17.51% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -35.37% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
V
Beta in relation to market/S&P 500--0.90
Expected beta in 1 year's time:
0.643
Expected beta in 3 year's time:
0.91
Unlevered (debt free) Beta:
0.658
Beta in relation to Nasdaq (XNAS):
0.855
Beta in relation to all global stocks::
0.799
Beta Comparison & Analysis
Beta of competitors/peers::
1.101
Beta is -18.10% lower than peers
Average Industry Beta:
1.332
Beta is -32.31% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
27.38%
Sustainable growth rate is -18.86% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.010
Alpha is -114.55% below industry average alpha yield
Alpha is -63% below the market average
Analysis of Cost of Capital of
V
Equity cost of capital:
0.093
Equity cost of capital is -24.02% below industry mean WACC
Unlevered (without debt) cost of capital:
6.80%
Before-tax cost of debt:
2.50%
After-tax cost of debt:
1.98%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.98%
WACC is -8.29% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$13.02
Revenue growth rate per share of (3Y):
11.3
Annual revenue growth rate is -86.02% below industry average
EPS:
$5.59
Expected Annual growth rate of EPS (3Y):
-1.85%
Expected future EPS growth rate is -107.39% lower than the Credit Services industry
Free cash flow (FCF) per share:
$9.13
Balance sheet equity growth per share: 53.35%
Equity growth rate per share is 124.08% higher than the industry
Debt per share
$8.54
EBITDA per share
$9.41
Valuation Analysis Today of
V
P/E Ratio:
30.36
P/E Ratio of Competitors/Peers:
18.09
P/E ratio is 67.85% higher than main peers & is 150.13% higher than the industry
Stock price/value with industry average P/E ratio: $67.85
V is 191.47% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $35.23
Present value of the expected future dividends only: $21.33
P/S (Price to Sales ratio):
15.19
Price to sales ratio is 192.20% above the industry mean
P/B (Price to book value ratio):
11.3
Price to free cash flow: 21.66
-
Net income growth rate (3Y):
25.63%
Net income growth rate is 58.67% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 5.88%
Dividend yeild: 0.73%
Previous Dividend: $0.38
Previous adjusted dividend: $0.38
Previous Dividend: $1.45
Expected next dividend best case: $0.40
Expected next dividend worst case: $0.35
Average dividend payment (long-term): $0.33
Average dividend increase/decrease (growth rate) % per period: 2.39%
Expected next dividend payment date: 30/08/2022
Expected next dividend record date: 08/11/2022
Expected next dividend declaration date: 21/07/2022
Previous dividend payment date: 06/01/2022
Previous dividend record date: 13/05/2022
Previous dividend declaration date: 22/04/2022
Dividend History:
2022-05-12--$0.38
2021-11-10--$0.38
2021-05-13--$0.32
2022-02-10--$0.38
2021-08-12--$0.32
2021-02-11--$0.32
Dividend growth rate is -124.98% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
48.83%
Net debt to equity ratio:
17.13%
Debt to assets ratio:
21.57%
Net debt to assets ratio:
7.57%
Debt-to-asset ratio is -72.33% below industry average
Ability to repay debt:
Interest coverage ratio:
37.14
Interest coverage ratio is 278.07% more than industry average
Looking forward:
Debt growth rate:
-12.85%
Annual debt growth is -126% lower than industry average debt growth rate
Debt repayment rate in last quarter: 1.36%
Analysis of Key Statistics
Correlation of price movement with the market:
0.819
Statistical significance of correlation:
V has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.561
Stock price is 45.97% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.561
Correlation of price movement with Nasdaq (^IXIC):
0.008
Covariance of price movement with the market:
0.01
Kurtosis
7.91
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.29
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
V
Gross Profit Margin Ratio:
322%
Operating Profit Margin Ratio:
66.66%
Operating profit margin is 129.26% higher than the industry
Net Profit Margin Ratio:
322%
Effective Tax Rate:
24.06%
Effective tax rate is 11.11% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
38.03%
Return on equity (ROE) is -10.30% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
16.80%
Return on assets (ROA) is 177.27% higher than the industry
Financial Leverage:
1.3x
Current Ratio:
1.4
Current ratio is -75.85% below industry average
Cash Conversion Cycle (days):
38.7
Cash conversion cycle is -70.80% below industry average
The remaining useful life of property plant & equipment is: 2.1 years
Stock based compensation to net income ratio:
0.93%
In-depth Efficiency Analysis
Revenue generated per employee:
1.3M
Each employee generates 73% more revenue than industry average revenue per employee
EBITDA generated per employee:
905.2K
Each employee generates 116% more EBITDA than industry average revenue per employee
Profit generated per employee:
640.2K
Each employee generates 164% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
188.8K
Each employee generates 222% more free cash flow than industry average revenue per employee
Assets/Capital per employee
2.6M
Each employee generates 222% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
V
JPMORGAN CHASE & CO. (XNYS:JPM)
BANK OF AMERICA CORPORATION (XNYS:BAC)
MASTERCARD INCORPORATED. (XNYS:MA)
Siemens AG (XSWX:SIN)
WELLS FARGO & COMPANY (XNYS:WFC)
MORGAN STANLEY (XNYS:MS)
THE CHARLES SCHWAB CORPORATION (XNYS:SCHW)
ROYAL BANK OF CANADA (XNYS:RY)
THE TORONTO-DOMINION BANK (XNYS:TD)
Current Analyst Ratings
Strong buy�54%
Buy�92%
Hold�17%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
26.94B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
5.25B
21.68B
-
1.45B
2.77B
1.32B
811.00M
3.58B
-
524.00M
811.00M
19.46B
17.96B
13.77B
18.13B
4.36B
13.77B
Statement of Cash Flow
Date:
Period:
198.00M
Differed Income Tax :
- 15000.00K
Stock Based Compensation :
128.00M
Change in Working Capital :
- 2139000.00K
Accounts Receivables:
- 213000.00K
Other Working Capital:
- 2339000.00K
Other Non-Cash Items:
2.10B
Net Cash Provided by Operating Activities:
4.23B
Investments in PP&E:
- 173000.00K
Net Acquisitions:
- 832000.00K
Purchases of Investments:
- 988000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
12/31/21
2022
Q1
14.72B
1.20B
15.92B
3.96B
-
6.03B
25.91B
2.91B
16.56B
27.27B
2.09B
-
7.20B
56.02B
-
81.93B
252.00M
3.25B
-
-
15.07B
18.57B
17.67B
3.42B
27.17B
-
45.74B
-
14.61B
- 72000.0K
21.66B
December 31, 2021 at 12:00:00 AM
8.83B
36.19B
81.93B
3.29B
20.92B
6.2B
1.37B
72.00M
- 547000.00K
- 244000.00K
-
- 4104000.00K
- 809000.00K
190.00M
- 4967000.00K
- 194000.00K
- 1476000.00K
18.32B
19.80B
4.23B
- 173000.00K
4.06B
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
V
2023
2024
2025
2026
2027
$197.54
$209.51
$222.20
$235.67
$249.95