If You Invested $1000 in Visa a Decade Ago, This is How Much It'd Be Worth Now
How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Visa (V) ten years ago? It may not have been easy to hold on to V for all that time, but if you did, how much would your investment be worth today?
Visa's Business In-Depth
With that in mind, let's take a look at Visa's main business drivers.
Incorporated in 2007 as a Delaware stock corporation and headquartered in San Francisco, CA, Visa Inc. operates as a payments technology company all over the world. The company went public in March 2008 via an initial public offering (IPO). It was founded in 1958. The company has evolved and grown over the course of the last six decades:
It provides transaction processing services (primarily authorization, clearing and settlement) to financial institutions and merchant clients through VisaNet, its global processing platform. It offers a wide range of Visa-branded payment products, which its financial institution clients would develop and offer core business solutions, credit, debit, prepaid and cash access programs for account holders (individuals, businesses and government entities).
Visa provides other value-added services to its clients including fraud and risk management, debit issuer processing, loyalty services, dispute management, digital services like tokenization as well as consulting and analytics. It manages and promotes its brands to the benefit of its clients and partners through advertising, promotional and sponsorship initiatives with the Olympic Games, FIFA and the National Football League among others.
In recent years, the company has evolved its organization to accelerate the migration of digital payments across new channels including e-commerce, mobile and wearables. The company has adopted new digital payment and security technologies, such as contactless and tokenization.
It has accelerated the pace of change in digital payments by making application programming interfaces (APIs) available in an effort to increase access to its network, products and services, offering innovation opportunities at its 10 global innovation network locations and building partnerships with new players, such as financial technology companies, or fintechs.
As the company's activities are heavily interrelated, it has one reportable segment, Payment Services. The primary revenue segments are: Service revenues (33.7% of gross revenues in fiscal 2022), Data Processing revenues (36.5%), International Transaction revenues (24.8%) and Other revenues (5%).
Bottom Line
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Visa a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in April 2013 would be worth $5,615.38, or a gain of 461.54%, as of April 14, 2023, and this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 160.96% and gold's return of 25.60% over the same time frame.
Going forward, analysts are expecting more upside for V.
Visa’s numerous buyouts and alliances paved the way for long-term growth and consistently drove its revenues. For fiscal 2023, net revenues are estimated to rise in the high single digits on a reported nominal dollar basis. Constant investments in technology are solidifying its position in the payments market. A shift in payments to the digital mode is a boon for Visa. Steady domestic volumes and transactions rise will aid the company to boost its top line in the coming years. A strong cash position enables it to boost shareholder value. Visa's stock has outperformed the industry in a year. However, high operating expenses stress the company's margins. Ramped-up client incentives will dent the top line. The company's volumes will likely suffer due to the Russia-Ukraine conflict. As such, the stock warrants a cautious stance.
Shares have gained 7.01% over the past four weeks and there have been 1 higher earnings estimate revisions for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.
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Visa Inc. (V) : Free Stock Analysis Report
