In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating Visa V against its key competitors in the Financial Services industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.
Visa Background
Visa is the largest payment processor in the world. In fiscal 2023, it processed almost $15 trillion in total volume. Visa operates in over 200 countries and processes transactions in over 160 currencies. Its systems are capable of processing over 65,000 transactions per second.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Visa Inc | 30.54 | 14.49 | 16.70 | 12.62% | $6.45 | $7.13 | 9.57% |
| Mastercard Inc | 37.69 | 61.37 | 17.50 | 44.44% | $4.32 | $5.35 | 11.04% |
| Fiserv Inc | 31.09 | 3.66 | 5.41 | 3.14% | $2.22 | $3.12 | 7.38% |
| PayPal Holdings Inc | 18.83 | 3.85 | 2.69 | 5.46% | $1.75 | $3.61 | 8.21% |
| Fidelity National Information Services Inc | 83.57 | 2.70 | 4.90 | 1.39% | $0.8 | $0.95 | 2.68% |
| Block Inc | 63.56 | 2.19 | 1.84 | 1.02% | $0.6 | $2.23 | 11.21% |
| Global Payments Inc | 20.73 | 1.28 | 2.95 | 1.68% | $1.08 | $1.63 | 4.74% |
| Corpay Inc | 22.73 | 7.90 | 6 | 8.38% | $0.51 | $0.77 | 2.9% |
| Jack Henry & Associates Inc | 33.58 | 6.95 | 5.79 | 5.58% | $0.18 | $0.23 | 4.73% |
| WEX Inc | 35.64 | 4.75 | 3.33 | 4.32% | $0.25 | $0.41 | 8.4% |
| Shift4 Payments Inc | 52.05 | 8.19 | 1.91 | 5.7% | $0.13 | $0.23 | 29.83% |
| Euronet Worldwide Inc | 17.53 | 3.72 | 1.31 | 6.76% | $0.18 | $0.41 | 5.02% |
| The Western Union Co | 7.12 | 8.94 | 0.97 | 33.62% | $0.24 | $0.4 | -8.85% |
| StoneCo Ltd | 11.42 | 1.37 | 1.76 | 3.29% | $1.13 | $2.25 | 11.86% |
| PagSeguro Digital Ltd | 8.95 | 1.17 | 1.80 | 3.59% | $1.83 | $-0.02 | 6.74% |
| Payoneer Global Inc | 29.15 | 4.32 | 3.24 | 4.87% | $0.06 | $0.2 | 15.86% |
| Paymentus Holdings Inc | 85.42 | 6.12 | 4.02 | 2.1% | $0.02 | $0.06 | 32.55% |
| DLocal Ltd | 19.57 | 5.54 | 3.69 | 10.06% | $0.06 | $0.07 | 6.29% |
| Evertec Inc | 32.30 | 4.49 | 2.85 | 6.44% | $0.09 | $0.11 | 26.88% |
| Average | 33.94 | 7.7 | 4.0 | 8.44% | $0.86 | $1.22 | 10.41% |
By closely examining Visa, we can identify the following trends:
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With a Price to Earnings ratio of 30.54, which is 0.9x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
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It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 14.49 which exceeds the industry average by 1.88x.
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With a relatively high Price to Sales ratio of 16.7, which is 4.17x the industry average, the stock might be considered overvalued based on sales performance.
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The Return on Equity (ROE) of 12.62% is 4.18% above the industry average, highlighting efficient use of equity to generate profits.
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Compared to its industry, the company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $6.45 Billion, which is 7.5x above the industry average, indicating stronger profitability and robust cash flow generation.
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The gross profit of $7.13 Billion is 5.84x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.
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The company is witnessing a substantial decline in revenue growth, with a rate of 9.57% compared to the industry average of 10.41%, which indicates a challenging sales environment.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
In terms of the Debt-to-Equity ratio, Visa stands in comparison with its top 4 peers, leading to the following comparisons:
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When comparing the debt-to-equity ratio, Visa is in a stronger financial position compared to its top 4 peers.
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The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.54.
Key Takeaways
For Visa, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB and PS ratios suggest strong market sentiment and revenue multiples. In terms of ROE, EBITDA, and gross profit, Visa demonstrates high profitability and operational efficiency. However, the low revenue growth may raise concerns about future performance compared to industry peers in the Financial Services sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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