The Zacks Analyst Blog Visa, Mastercard and American Express

Core Insights - Visa Inc. reported strong Q4 fiscal 2025 results, driven by increased processed transactions and payment volumes, indicating stability and growth potential for investors [2][4][19] Financial Performance - Visa's Q4 EPS was $2.98, beating the Zacks Consensus Estimate by $0.01, and grew 10% year over year [4] - Total revenue reached $10.7 billion, exceeding estimates by 1% and reflecting a 12% year-over-year increase [4] - Processed transactions grew 10% year over year to 67.7 billion, surpassing estimates [5] Growth Drivers - Cross-border volumes surged 12% year over year, driven by increased travel activity [5] - Payment volumes increased by 9% year over year on a constant-dollar basis [5] - Value-Added Services (VAS) revenue grew 25% in constant dollars to $3 billion, now approaching 30% of Visa's total revenue [6][7] Strategic Initiatives - Visa is expanding its digital asset infrastructure, managing over $140 billion in crypto and stablecoin flows since 2020 [9] - The company is positioned as a critical player in international payments through its Visa Direct prefund initiatives [8] Regulatory Environment - The passage of the GENIUS Act provides regulatory clarity for digital assets, benefiting Visa's operations [10] - Visa is authorized to settle across four stablecoins and four blockchains, enhancing its competitive edge [10][11] Shareholder Returns - Visa returned $6.1 billion to shareholders in Q4, including $4.89 billion through buybacks and $1.2 billion in dividends [13] - The dividend yield stands at 0.69%, slightly above the industry average [13] Market Position - Visa's market cap is $623.7 billion, providing a strong competitive moat [12] - Analyst estimates suggest an 11.7% and 13.3% increase in EPS for fiscal 2026 and 2027, respectively [14] Competitive Landscape - Visa faces increasing competition from retail giants like Walmart and Amazon exploring stablecoin options [17] - Ongoing legal challenges, including an antitrust lawsuit and regulatory scrutiny in the U.K., pose risks [18] Valuation Metrics - Visa shares have risen 7.6% year to date, underperforming the S&P 500's 16.7% gain [15] - The stock trades at a forward P/E of 26.19, above the industry average of 20.81 [16]