Visa Inc. (V): A Bull Case Theory 

We came across a bullish thesis on Visa Inc. on Quality Value Investing’s Substack by David J. Waldron. In this article, we will summarize the bulls’ thesis on V. Visa Inc.’s share was trading at $326.98 as of January 28th. V’s trailing and forward P/E were 31.89 and 25.38 respectively according to Yahoo Finance.

Visa Inc. operates as a payment technology company in the United States and internationally. V is a dividend-paying, large-cap financial services company operating at the core of global transaction and payment processing. Added to the QVI Real-Time Stock Picks in October 2022, Visa represents a high-quality compounder with a scalable, capital-light business model that converts roughly half of its revenue into bottom-line profits. As one of the world’s most recognized payment networks, Visa serves consumers, merchants, financial institutions, and governments through its broad portfolio of brands, benefiting from massive global reach and entrenched usage across everyday commerce.

Visa’s competitive positioning is underpinned by a wide economic moat, driven by a powerful network effect that reinforces itself: greater consumer adoption attracts more merchants, which in turn enhances convenience and value for consumers. This dynamic creates durable pricing power and a cost advantage that few competitors can replicate.

Financially, Visa has delivered strong long-term growth, with double-digit annualized revenue expansion over the past five years, while maintaining exceptionally high profitability. Its net margins meaningfully exceed broader market medians, supported by a services-heavy model and gross margins exceeding 50%.

Management execution further strengthens the investment case. Visa consistently generates high double-digit returns on equity and industry-leading returns on invested capital that far exceed its cost of capital, highlighting disciplined capital allocation. Shareholder returns are enhanced through an aggressive buyback program, including a newly authorized $30 billion repurchase plan, alongside a growing dividend.

These actions have boosted earnings per share and owners’ earnings, with combined EPS and dividend growth delivering high double-digit annualized returns over the past five years. Overall, Visa’s wide moat, superior profitability, strong cash generation, and shareholder-friendly capital allocation make it a compelling long-term holding with resilient fundamentals and attractive compounding potential.

Previously, we covered a bullish thesis on Visa Inc. (V) by Margin of Sanity in May 2025, which highlighted the company’s durable network effects, duopolistic market structure, capital-light model, and consistent shareholder returns. V’s stock price has depreciated by approximately 10.44% since our coverage due to valuation normalization. David J. Waldron shares an identical view but emphasizes returns on capital, owners’ earnings, and disciplined capital allocation.

Visa Inc. is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 179 hedge fund portfolios held V at the end of the third quarter which was 167 in the previous quarter. While we acknowledge the risk and potential of V as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than V and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.