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Visa Inc
V : NYSE : Financial
$77.23 -1.20 | -1.60%
Today's Range: 76.93 - 78.36
Avg. Daily Volume: 9,266,800
05/03/16 - 1:17 PM ET

Financial Analysis


VISA INC's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. VISA INC is extremely liquid. Currently, the Quick Ratio is 4.56 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has increased from the same period last year.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 3.16% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)3626.03409.0
EBITDA ($mil)2556.02409.0
EBIT ($mil)2435.02284.0
Net Income ($mil)1707.01550.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)22008.06863.0
Total Assets ($mil)54326.038835.0
Total Debt ($mil)15876.00.0
Equity ($mil)29131.028237.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin70.4970.67
EBITDA Margin70.4970.66
Operating Margin67.1567.0
Sales Turnover0.260.34
Return on Assets12.6214.29
Return on Equity23.5319.66
Debt Q2 FY16 Q2 FY15
Current Ratio4.741.86
Debt/Capital0.350.0
Interest Expense132.07.0
Interest Coverage18.45326.29


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)2385.02448.0
Div / share0.140.12
EPS0.710.63
Book value / share12.2111.53
Institutional Own % n/a n/a
Avg Daily Volume9769122.01.0479968E7

Valuation


BUY. VISA INC's P/E ratio indicates a premium compared to an average of 24.96 for the IT Services industry and a premium compared to the S&P 500 average of 23.99. To use another comparison, its price-to-book ratio of 6.36 indicates a significant premium versus the S&P 500 average of 2.74 and a significant discount versus the industry average of 8.21. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. The valuation analysis reveals that, VISA INC seems to be trading at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
V 27.55 Peers 24.96   V 28.06 Peers 21.15

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

V is trading at a premium to its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

V is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
V 24.43 Peers 21.37   V 3.91 Peers 2.71

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

V is trading at a significant premium to its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

V trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
V 6.36 Peers 8.21   V 26.17 Peers 11.04

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

V is trading at a discount to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

V is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
V 12.97 Peers 5.41   V 8.38 Peers 6.25

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

V is trading at a significant premium to its industry.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

V has a sales growth rate that significantly exceeds its peers.

 

 

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