How Recent Digital Wallet Innovations Could Impact Visa’s Share Price in 2025

• Wondering if Visa stock is attractively valued, overpriced, or somewhere in between? You're not alone. Let’s demystify the numbers behind this payments giant.
• Visa's share price has seen some ups and downs recently, with a 2.7% decline in the last week and a 4.7% dip over the past month. Even so, its year-to-date return sits at a solid 3.6% and long-term gains remain strong.
• Recent headlines around ongoing innovations in digital wallets and new global partnerships have kept Visa firmly in the spotlight. These moves have sparked conversations about its long-term position in the fast-changing payments industry and may be shaping how investors view its current risk and reward profile.
• On the numbers front, Visa scores just 2 out of 6 for undervaluation according to our valuation checks, which is a useful starting point. Up next, we'll break down how different valuation methods stack up. Stick around for an even more insightful take on what valuation really means for Visa.

Visa scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Visa Excess Returns Analysis

The Excess Returns model helps investors assess whether a company is generating returns on its invested capital above the required cost for equity holders. In Visa’s case, this model analyzes how efficiently Visa turns shareholder investment into profits over time, going beyond simple price or earnings ratios.

For Visa, several key valuation metrics stand out:

• Book Value: $19.38 per share
• Stable Earnings Per Share (EPS): $16.34 per share
  (Source: Weighted future Return on Equity estimates from 13 analysts.)
• Cost of Equity: $1.68 per share
• Excess Return: $14.67 per share
• Average Return on Equity: 72.09%
• Stable Book Value: $22.67 per share
  (Source: Weighted future Book Value estimates from 9 analysts.)

According to this model, Visa’s ability to consistently generate significantly higher returns than its cost of equity increases the company’s intrinsic value. The Excess Returns analysis estimates that Visa is trading at a 13.8% discount to its intrinsic value, indicating the stock may be undervalued at current levels.

Result: UNDERVALUED

Our Excess Returns analysis suggests Visa is undervalued by 13.8%. Track this in your watchlist or portfolio, or discover 894 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Visa.

Approach 2: Visa Price vs Earnings

The Price-to-Earnings (PE) ratio is a widely used valuation metric for profitable companies like Visa because it neatly reflects how much investors are willing to pay for each dollar of a company’s earnings. For well-established businesses that consistently generate strong profits, the PE ratio offers a quick way to gauge if the stock price makes sense relative to its earnings power.

Growth expectations and perceived risk influence what is considered a “normal” or “fair” PE ratio. Fast-growing companies or businesses with lower risk profiles typically command higher multiples, while slower growth or higher-risk firms trade at lower ones.

Currently, Visa trades at a PE ratio of 31.41x. This is substantially higher than the Diversified Financial industry average of 13.00x and the average of its closest peers at 16.59x. However, comparing a stock only to industry or peer averages can be misleading when companies have different growth prospects or risk profiles.

Simply Wall St’s Fair Ratio addresses this issue. The Fair Ratio, at 20.82x for Visa, is a proprietary benchmark that factors in the company’s specific growth outlook, profit margins, industry dynamics, market cap, and risk factors. This tailored approach provides a more accurate picture of what Visa’s PE ratio should be, rather than relying solely on broad industry averages.

Since Visa’s current PE ratio (31.41x) is significantly above its Fair Ratio (20.82x), this suggests the stock may be trading higher than what is warranted by its fundamentals when viewed through this lens.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1417 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Visa Narrative

Earlier we mentioned that there's an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is a way to tell your own story about a company by connecting the facts, such as Visa’s expected revenue, earnings, and margins, to your assumed fair value.

Instead of relying on industry averages or analyst targets, Narratives give you the power to describe your unique perspective on why Visa is worth a certain price. This approach links your reasoning directly to a financial forecast and a fair value estimate. It makes investing less about guesswork and more about transparent decision-making, so you can easily update your thinking as new information emerges.

On Simply Wall St’s Community page, millions of investors use Narratives to keep their investment outlooks clear and up-to-date. Narratives help you decide when to buy or sell by dynamically comparing your chosen fair value to the current share price, which updates if the facts or your assumptions change due to new earnings or breaking news.

For Visa, investors in the Community have dramatically different views. Some believe Visa is worth as much as $430 per share, reflecting optimism about global fintech expansion and value-added services. Others see its fair value closer to $305, citing risks from rising competition and regulatory pressure.

Do you think there's more to the story for Visa? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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