Visa Looks to Capitalize on Growing Interest in Crypto

Analyzing Visa’s core fundamentals on cryptocurrency news

Dec 13, 2021 at 11:55 AM
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Visa Inc. (NYSE:V) is one of the biggest financial services corporations in the world. The credit card company facilitates digital payments and electronic funds transfers throughout the world, most commonly through Visa-branded credit cards, debit cards, and prepaid cards. This afternoon, V is trading down 1.4% at $210.41.

Visa stock has increased about 2% year-over-year and V is trading up 10% since bottoming out at a 52-week low of $190.10 earlier this month. Shares of V have fallen back below the year-to-date breakeven mark, and are trading 16% below the stock's late-July record high of $252.67. Moreover, Visa offers a forward dividend of $1.50 with a dividend yield of 0.70%, and looks to be running into overhead pressure at the 50-day moving average.

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On Dec. 8, Visa announced the launch of Visa’s Global Crypto Advisory Practice. This is an offering within Visa Consulting & Analytics designed to help clients and partners advance their own cryptocurrency journey. Through Visa's work with more than 60 crypto platforms, Visa’s global network of consultants will help financial institutions evaluate the cryptocurrency opportunity, develop strategies, and pilot new user experiences and innovations like crypto rewards programs and CBDC-integrated consumer wallets.

From a fundamental point of view, Visa stock is overvalued by almost all metrics. Visa stock trades at an inflated price-earnings ratio of 37.92 and V totes a notably high price-sales ratio of 19.37. Visa’s overall growth rate simply does not warrant the high valuation metrics it trades at, including V's forward price-earnings ratio of 29.94.

Regardless, analysts are looking overwhelmingly optimistic toward the credit card name. Heading into today, 22 of 23 covering brokerages boast a "buy" or "strong buy" recommendation. Even further, the equity's average 12-month price targets comes in at $274.53; a more than 30% premium to current levels.

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