Should You Buy Visa Stock While It's Below $378?

Core Viewpoint - Visa is viewed as a stable long-term investment with significant growth potential, supported by its strong market position and historical performance [1][2]. Group 1: Company Overview - Visa operates one of the largest card payment processing networks globally, partnering with banks to issue Visa-branded cards while routing payments through its network [4][5]. - The company charges a swipe fee of approximately 1.5% to 3.5% per transaction, sharing these fees with card issuers, which allows for rapid expansion with minimal credit risk [5][6]. Group 2: Financial Performance - From fiscal 2019 to fiscal 2024, Visa's revenue experienced a compound annual growth rate (CAGR) of 9%, while earnings per share (EPS) grew at a CAGR of 13%, demonstrating resilience amid economic challenges [7]. - Analysts project that from fiscal 2024 to fiscal 2027, Visa's revenue and EPS will continue to grow at CAGRs of 10% and 13%, respectively [11]. Group 3: Market Position and Competition - Visa and Mastercard dominate the card-based payment market, making it difficult for digital payment apps to disrupt their business model, as most require linkage to traditional debit or credit cards [6]. - The company faces ongoing pressure from merchants to reduce swipe fees, which has led to regulatory scrutiny and legal challenges regarding its market practices [8][9]. Group 4: Future Outlook - Analysts remain optimistic about Visa's future, with 30 out of 37 covering analysts rating it as a buy, and the stock trading below the highest price target of $378 set by Bernstein's Harshita Rawat [2][3]. - Potential macroeconomic challenges include regulatory changes and currency fluctuations, but a favorable political environment could alleviate some of these pressures [10][11]. - At a stock price of$323, Visa is considered reasonably valued, with a recommendation to buy before it reaches the higher price target [12].