QS Research · Michael Burry's Scion Capital analyst template · 2006
VISA INC. (V)
As of 2026-11-08 · 13/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction medium · base case +10% · downside -20% · upside +12%
Visa is not a lender and converts $45.90B of FY Sep 2026 revenue into $28.11B operating income, $23.50B net income and $22.06B FCF, while a $198.34B market cap puts it at 8.4x P/E, 7.0x EV/EBITDA and an 11.1% FCF yield (N8, N9, N12, N15, N6, N27, N24, N28). The market is clearly discounting the earnings stream: FY2027 guidance is only low-double-digit revenue and EPS growth versus 15-16% in FY2026, client incentives rose 21% faster than Q4 revenue +13%, and 25% of payments volume faces renewal (S77, S58, S11, S5). At today's 8.4x P/E, I get base +9.5% on 10% EPS growth, downside -20.4% on a 20% earnings decline, and upside +12.5% on 13% EPS growth, so the long rule (base +30% with downside no worse than -25%) is not met. This is a watch: the peer-relative earnings multiple and 11.1% FCF yield could support a re-rating, but the stock is only 4.4% off its 52-week high and no non-valuation catalyst yet forces the gap closed (N2, N28).
Key numbers
- Share price: $422.65
- Market cap: $198.34B
- Latest financial period: FY Sep 2026 to Sep 30, 2026
- Revenue (FY Sep 2026): $45.90B
- EV / EBITDA (FY Sep 2026): 7.0x
- P/E (FY Sep 2026): 8.4x
The 15 boxes
- ✓ 1. Long-form business notes
Visa runs a fee-based, four-party payments network: it earns service, data processing, international transaction and other revenue from issuers, acquirers and sellers, less client incentives, and it does not issue cards, extend credit or take credit risk. Scale has roughly doubled since FY2020 (204 billion transactions and $11.3 trillion of volume in fiscal 2020 versus 355 billion transactions and $18 trillion in fiscal 2026), with revenue of $45.90B and operating income of $28.11B in FY2026 against $24.11B and $15.80B in FY2021. The business description has widened from card-based consumer payments plus 'new flows' and VAS to three named pillars — consumer payments, commercial and money movement solutions, and value-added services — with VAS now framed as a ~$520 billion annual revenue opportunity and newer build-outs in stablecoins, agentic commerce and issuer processing/open banking acquisitions.
- ✓ 2. Competitive advantage
The sources support a durable network-and-scale advantage, not a brand story: calendar 2025 payments volume of $14,567B and 336B transactions (Nilson-sourced chart, cards as of December 31, 2025) put Visa ahead of Mastercard's $8,812B and 223B, and the economics show it — operating income was 60.0%-65.7% of revenue in every year FY2021-FY2026 (computed from the XBRL figures), and FY2026 capex of $1.67B produced $23.73B of operating cash flow on $45.90B revenue. But the moat is under visible attack on the rails and the licences: RTP networks have launched in over 100 countries and cross-border RTP 'will compete with our cross-border business', and in China Visa still cannot clear domestic bank card transactions despite the October 2026 Application to Prepare approval. The FY2026 10-K shows the anxiety: 51 risk-factor paragraphs are new or rewritten versus the prior year, largely around AI, agentic commerce, stablecoins and payment sovereignty.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended June 30, 2026) was a growth quarter with a cost bulge: net revenue $11,633M, +14% (+13% constant-dollar), on 10% processed-transaction growth and 10% constant-dollar payments volume, while GAAP operating expenses rose 19% to $4,756M on $563M of severance and 54% higher marketing. GAAP net income of $5,628M (+7%) and EPS of $2.97 (+10%) were struck after severance, a $237M MDL litigation provision and an $18M deferred tax benefit; non-GAAP EPS was $3.32, +11%. Visa returned $6.2B via buybacks and dividends in the quarter, held $13.9B of cash and investment securities at June 30, 2026, and gave no numeric guidance in either the 10-Q or the July 28, 2026 earnings release.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ✓ 11. Impression of the shareholder letter
Filled; members read this box.
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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