Visa Cryptocurrency Stock

Visa Stock: Still A Window Of Opportunity (NYSE:V)

I want to get out for some fresh air
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Did you miss it?

Back on November 17, it revealed an opportunity with Visa (NYSE: V). This is exactly what I wrote:

…if you’re really conservative you might consider waiting until $190 but that’s “risky” – maybe you’re trying too hard to get a bargain. Now, we’re in a very good place. It would certainly make sense to set up a starting position, then if it goes down, Layer at $195, then again at $190.

There are several important points here. V is a smart investment for conservative investors. V is a hard stock for the perfect time. It does not appear to be for sale. Finally, you could create a deal to acquire V at a great price. (See the pre-market view below from Monday, November 29.)

Visa stock chart

Source: Alpha search and author

You will see that V drops below $195. So, you could have made a starting position or held more for your position, in little layers.

Meanwhile, we didn’t hit $190, which is fine. $195 was a great price to grab a V and enjoy some good value.

However, I will stress again that timing 5 can be tricky. They are always trading at a high level, so you have to choose to “buy points” early on, and be prepared to strike.

what about now?

There is still a window of opportunity. With that, I’ll refer you to something else I said earlier:

Briefly, Buying about 205 dollars makes senseEspecially if you’re just starting a new position or if you’ve been making dollar averaging along the way.

Yes, we are over $190. And as I write this, we’re also well over $195. But where Still under 205 bucks. In other words, we are still in the buying zone.

However, what causes the current headache? The truth is, it’s not one simple thing, like losing a key customer, or some deep weakness. We’ll explore this, but this will also lead us to a bigger challenge.

Problems in the news

I’ve already discussed V’s P/E squeeze. As you already know, the key point is that we’re seeing an alternation of growth to value with some stocks. But there may be a deeper problem.

Let’s look at News to see if there is evidence. I will skip amazon (NASDAQ: AMZN) In the UK, that’s where I covered it here. So, what about India? Well, RuPay can’t be the problem either because this news just came out. There is also a new COVID variant. This hurt big banks, but also credit card stocks like V. But the negative impact was about 3%.

If we stop for a minute. Here’s a way to visualize what happened.

V stock chart.

Source: Alpha search and author

At its peak, V was at $235 at the end of October. So, we’re down about 16% from the top. Now, that’s what drove V to $197.

1. V beat estimates in the fourth quarter but provided a disappointing outlook in 2023.

“Given the forecast for growth in four quarters, revenue growth is the biggest challenge, and is highly dependent on the pace of cross-border travel recovery,” he said, among a few other factors.

2. Amazon stops accepting UK Visa credit cards (November 17)

The online retail giant said Amazon will stop accepting Visa credit cards issued in the UK from January 19. (source)

3. Changing Concerns About Novel Coronavirus (November 26)

Payments stocks have come under pressure amid the resurgence of Covid-19 cases in Europe, raising fears that re-imposing large-scale lockdowns could lead to a sharp drop in consumer activity. (source)

Again, the big show is the P/E pressure, given the rotation from growth to value. This means that the market is immersed in negative news, looking for opportunities and reasons that help mitigate the news of V.

Therefore, in a normal environment, a lot of this news flows like water from the back of a duck. Normally V does not blink and the price will not move with difficulty. Instead, we’re seeing every bit of negative news amplified.

However, there is more to add as a reminder. Specifically, like many stocks, V climbs the ladder slowly and carefully. There is a wall of anxiety to climb. On the other hand, in times of P/E stress, the market amplifies negative news and we see V fall off the cliff again and again. There was not enough time for growth to “heal” the wounds of the upcoming negative news.

Altogether, my biggest concern is that there may be a real slowdown in growth. I don’t care much about negative perceptions or news. I’m more concerned about the actual decline in the growth rate. Is there a concern?

Perspectives on growth

Let’s zoom back out and look at V over multiple time periods. Specifically, let’s look at adjusted operating profit, which will include future projections for 2022 and 2023.

  • 15 years = 20%
  • 14 years = 19%
  • 13 years = 18%
  • 12 years = 17%
  • 11 years = 17%
  • 10 years = 16%
  • 9 years = 16%
  • 8 years = 16%
  • 7 years = 17%
  • 6 years = 16%
  • 5 years = 13%

To further illustrate this, let’s take a look at both the 15 Year Show and the 5 Year Show, via FASTgraphs. Here’s the 15-year view:

V stock display 15 years

Source: FASTgraphs

Here’s the five-year view:

V stock offer 5 years

Source: FASTgraphs

From a 15-year perspective, you can see an exponential growth level: 30%, 34%, 28%, and so on, in the early years. Of course, as V grew, growth slowed. On a 5-year look, we see 18%, -7% (the impact of COVID), and 17%. And look forward, The growth rate is expected to reach 19% in 2022 and 2023.

To be perfectly clear about the growth forecast extracted from the quick graphs, we are talking about an average pulled from above 30 analysts. As I noted before, looking for alpha tells us that Wall Street is bullish:

Visa Classifications

Source: Find Alpha

At least in terms of priceAnd Wall Street expects V to reach $273 in one year. This is somewhere around 35% higher than where we are today.

So, these are the analysts but what about the V company itself? What kind of growth does the company expect in the future? Well, according to Investor Business Daily:

Visa sees revenue growth in 2022 at “maximum mid-teens”. Analysts had targeted 20% growth.

The strange thing is that the high-end teenage ending is perfectly in line with history. And literally 17-19% correspond to more than 30 analysts I referred to earlier.

Summing up all this, we know that the growth of V has slowed since the early years. This is indisputable. However, despite some hazy guidance, V is still looking at 17-19% growth in 2022 and 2023, which I can tell. V does not seem to have missed expectations. And the news isn’t all that bad — I mean, not bad enough to bring the V down from $235 to $195.

I will remind investors again that there is some price/profit pressure for sure, probably Because of the turnover of value growth. But what that also means is that the V is up for sale, at least compared to its own history and projected underlying growth. If there was an actual slowdown in growth, or an expected slowdown in growth, the story would change completely. V must grow, or P/E must compress, and remain compressed to reverse the hysteresis.

last thoughts

I admit I’m starting to get a little worried about the V stretching below $200. I thought V growth might have been regressing. However, it is very clear that V is still growing strongly in the 17-19% range, which is quite acceptable.

I will also remind investors of something important about the strengths of V. Company. It is a true growth company with competitive strength. In light of the UK controversy, keep in mind that Amazon (AMZN) is one of the few companies in the world that can challenge the V in any way.

Also, V has evolved over time. Most investors think of V as a credit card payment company, specifically consumers who pay companies. However, V also handles an incredible amount of business to business. For example:

Visa B2B Connect is built on Visa’s massive core payments capabilities and expertise, using distributed ledger technology to provide direct settlement of high-value transactions. Visa B2B Connect can help financial institutions and their customers overcome costly processes and geographic barriers, which translate into an improved and seamless experience from start to finish.

This includes multiple bank-to-bank transaction points across robust token opportunities and related infrastructure:

  • Bank API
  • Company API
  • Payments API
  • Data Reference API

For those concerned about cryptocurrency and blockchain, V’s leadership also indicated that they are on top of the changes. Here’s a glimpse:

The second thing we did was also, several years ago, basically announcing it We are a network of networks. We want to be interoperable across networks. We want to be able to get your money wherever you want it. It doesn’t have to be – the whole journey doesn’t have to be on our network alone. So if you need to get your money through ACH, an RTP network, we’ll do it. We’ll also be interoperable, by the way, via the blockchain. We have already begun to settle in the United States BC. We will settle in additional stablecoins over time. We will be interoperable across currencies, and we will be Interoperable with cryptocurrencies. Look, we’re a network of networks and we can serve all kinds of money movement use cases. So the fact that our tubes don’t make the tubes themselves valuable, right, has to be adapted to the use cases. So our point is that by being a network of networks and being able to serve any use case and get your money where you want it, and then put the value we add right, which is what we make it so reliable, we make it super secure. [Emphasis: Author]

In short, V will grow. They will not only grow up through “old school” tubes or build on their past success. They are using new technology. They are merging. It is not single-purpose or limited in scope. There is a lot more going on behind the scenes than many investors realize. V is still a growth story.

The window of opportunity is still open. V is the purchase of less than 205 dollars.

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