Visa, Inc. (V)

> Overpriced, has to come down
> Stupidly high pricing ... US should start limiting profits by regulations, like Europe. Over the years, technology and supporting costs came down. But customer pricing remains high

overvalued

It's a fine brand, I just don't think it's worth 37x earnings

The market's overconfidence has supported many financial stocks, including ones where growing unemployment and higher taxes will hurt revenue. At some point over this next year, the stock price will better reflect this risk and the lower expected profits.

VISA looks a little expensive at 36 x reported earnings. That fact coupled with the weakening macro-economics in the US suggest that transaction volumes will be dropping over the next few quarters (maybe longer). Also I am already starting to hear some convincing rumblings about a possibly weak Christmas retail season (see David Rosenberg of Gluskin+Sheff). Look to Q4 earnings in early 2010 to be a make or break report for V.

I have not done nearly enough due diligence on Visa to make a definitive call but the negative factors I have referenced above, coupled with the fact that I believe Visa and Master Card are more tied to the macro-economy than some other firms gives me confidence in making an underperfrom call in CAPS.

Overvalued right now

If you think waiting 37 years to make back your money is good I don't know what to tell you.

The late 20th century desease

known as consumerism

in death throes.

Awwww.

VISA too.

double awwww

Looks really pricey right now. Price = 30 x TTM cash flow. Not good.

Banks owned Visa wrote their agreements with them and then sold Visa to the public. They are all selling their remaining shares. Do you think they wrote the agreements favorable to Visa or favorable to themselves?

Visa would be a great buy... at thirty bucks. The company will do great I'm sure, but the stock price will underperform as it is too high already.

Was bullish with IPO, but downturn is going to hit this hard. They were silently profiting while credit was doled out without a second thought. Now, with banks raising rates and slashing limits, they are mandating frugality - or at least using cash. When the populace is doing whatever they can to not have debt, you can't charge a percentage on 0. Good for the masses, bad for the banks (and therefore V and MA).

Low Sales and Few Employees for Capital

Recent regulation by the government, rising unemployment, and steadily rising number of charge offs make me bearish on V, MA, COF, and AXP.

Way overpriced at this point.

Overvalued, harder times are coming for credit cards.

sky high P/E of 43.89 is unsustainable.

Good long-term company, should do well with the shift from credit to debit. But for now, it's been pumped up way too high and is due for a correction.

Great company, great growth prospects, wrong price. Visa's balance sheet is inflated by goodwill and intangible assets and once you discount those, their net tangible assets are only 55 cents per share. Earnings for their most recent fiscal year were 96 cents per share and operating cash flows were a mere 53 cents. The latter measure has traditionally been more consistent. Assuming $2 in FCFs yearly with an 8% growth rate for the next 20 years (before leveling off at 3% afterwards), I come up with a valuation in the $55 - 60 range. What that says to me is that this stock has very high expectations priced in. It's possible that Visa couuld eventually surpass these expectations, but I'm not going to bet on it. Therefore, I'm going with underperform over the next five years.

For a more thorough analysis, see my article on Seeking Alpha:

http://seekingalpha.com/article/129699-visa-not-everywhere-i-want-to-be