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In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Visa (NYSE:V) in relation to its major competitors in the Financial Services industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer valuable insights for investors and shed light on company's performance within the industry.
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 | 29.42 | 13.62 | 15.85 | 11.86% | $5.84 | $6.98 | 9.89% |
| Mastercard Inc | 34.47 | 55.66 | 15.87 | 42.49% | $3.92 | $4.83 | 10.44% |
| Fiserv Inc | 27.93 | 3.02 | 4.65 | 2.51% | $1.96 | $2.88 | 7.39% |
| PayPal Holdings Inc | 14.84 | 2.98 | 2.11 | 4.25% | $1.56 | $3.46 | 9.36% |
| Fidelity National Information Services Inc | 102.67 | 2.28 | 4.39 | 3.9% | $0.8 | $0.92 | 2.92% |
| Block Inc | 107.23 | 2.09 | 1.74 | 2.51% | $0.51 | $2.09 | 19.38% |
| Global Payments Inc | 18.85 | 1.09 | 2.52 | 1.39% | $0.95 | $1.5 | 5.57% |
| Corpay Inc | 20.33 | 5.90 | 5.34 | 7.03% | $0.48 | $0.73 | 3.76% |
| Jack Henry & Associates Inc | 31 | 6.59 | 5.36 | 4.97% | $0.17 | $0.21 | 5.9% |
| WEX Inc | 28.77 | 4.17 | 2.94 | 3.66% | $0.23 | $0.39 | 6.65% |
| Euronet Worldwide Inc | 17.69 | 3.69 | 1.35 | 2.1% | $0.09 | $0.32 | 8.87% |
| Shift4 Payments Inc | 44.95 | 6.37 | 1.53 | 3.1% | $0.1 | $0.19 | 29.32% |
| The Western Union Co | 7.33 | 10.54 | 1.03 | 32.55% | $0.24 | $0.41 | 1.18% |
| PagSeguro Digital Ltd | 12.91 | 1.64 | 2.47 | 3.57% | $1.77 | $0.2 | 10.15% |
| StoneCo Ltd | 13.85 | 1.49 | 1.95 | 2.52% | $0.9 | $2.14 | 15.45% |
| Paymentus Holdings Inc | 83 | 5.39 | 3.69 | 1.66% | $0.02 | $0.05 | 24.64% |
| DLocal Ltd | 18.23 | 4.86 | 3.48 | 3.8% | $0.05 | $0.06 | 34.34% |
| Evertec Inc | 31.52 | 3.96 | 2.78 | 2.9% | $0.07 | $0.1 | 28.47% |
| Payoneer Global Inc | 17.63 | 2.99 | 2.38 | 4.37% | $0.05 | $0.19 | 18.84% |
| Average | 35.18 | 6.93 | 3.64 | 7.18% | $0.77 | $1.15 | 13.48% |
Through a thorough examination of Visa, we can discern the following trends:
A Price to Earnings ratio of 29.42 significantly below the industry average by 0.84x suggests undervaluation. This can make the stock appealing for those seeking growth.
The elevated Price to Book ratio of 13.62 relative to the industry average by 1.97x suggests company might be overvalued based on its book value.
The stock's relatively high Price to Sales ratio of 15.85, surpassing the industry average by 4.35x, may indicate an aspect of overvaluation in terms of sales performance.
With a Return on Equity (ROE) of 11.86% that is 4.68% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $5.84 Billion, which is 7.58x above the industry average, indicating stronger profitability and robust cash flow generation.
With higher gross profit of $6.98 Billion, which indicates 6.07x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
With a revenue growth of 9.89%, which is much lower than the industry average of 13.48%, the company is experiencing a notable slowdown in sales expansion.
The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.
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.
When evaluating Visa alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
Visa demonstrates a stronger financial position compared to its top 4 peers in the sector.
With a lower debt-to-equity ratio of 0.53, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.
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.
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