Visa Stock Outpaces Peers in 2025 Despite Valuation Concerns

Visa Inc.’s V stock has rallied strongly in 2025, outperforming broader fintech and the S&P 500. The momentum largely reflects the ongoing strength in consumer spending and Visa’s solid position in global digital payments. It is currently priced at $350.50 per share.

In April, the company came out with second-quarter fiscal 2025 earnings of $2.76 per share, beating the Zacks Consensus Estimate of $2.68. This compares to earnings of $2.51 per share a year ago. Over the last four quarters, the company surpassed consensus EPS estimates four times. It posted revenues of $9.59 billion for the quarter, surpassing the Zacks Consensus Estimate of $9.56 billion. This compares to year-ago revenues of $8.78 billion. The company topped consensus revenue estimates three times over the last four quarters. Visa will report third-quarter earnings after the market closes on July 29.

Visa, which is part of the Zacks Financial Transaction Services industry, has also announced a new $30 billion share repurchase program, adding to a prior $25 billion authorization, shoring up investor confidence. This aggressive buyback initiative not only signaled management’s confidence in the company’s long-term prospects but also supported the stock price by reducing the share count and enhancing earnings per share.

Yet, Visa isn’t risk-free. Its P/E ratio currently is 30.66, significantly higher than both its industry and the S&P 500. Macro headwinds, including fading consumer strength or tighter central bank policy, could become an issue. Moreover, regulatory and litigation risks, notably antitrust scrutiny in the United States, Europe and the U.K., plus occasional litigation provisioning persist.

Balancing the pros and cons, Visa remains a compelling long-term holding. It benefits from digital migration, global payment expansion and fintech adoption, and is supported by robust free cash flow and shareholder-friendly capital returns. Given this backdrop, many institutional investors see it as a relatively safe haven compared to more volatile fintech peers.

Visa currently carries a Zacks Rank #2 (Buy). Year to date, Visa has grown 10.9% against a 22.5% decline for its Zacks Peer Group. PayPal Holdings, Inc. PYPL and Mastercard Incorporated MA are noteworthy competitors in the same space. While Mastercard has grown 5% in the period, PayPal has declined 13.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bottom Line

To summarize, Visa stock has delivered strong performance so far in 2025, underpinned by earnings and capital returns. Its durable digital moat, massive scale and cash flow make it an attractive core holding. But its lofty valuation limits potential upside makes a case of possible slower growth. Accepting those trade-offs, Visa remains a worthy investment for long-term portfolios.

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This article originally published on Zacks Investment Research (zacks.com).

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