After capping off 2019 with yet another increase in transaction volume and revenue, things have gotten hairy for Visa (NYSE:V). The fintech and digital payments leader's stock fell as much as 36% from its all-time highs in March, reeling with the rest of the market from the coronavirus pandemic and the ensuing lockdown on the economy. The stock remained nearly 24% off its highs at Thursday's close.  

On one hand, there are good reasons for this pullback. Visa has already indicated a sharp reduction in payment volume in March 2020 compared to the year-ago period, and -- like the second-largest digital payment platform, Mastercard -- it carried a hefty premium after more than a decade of market-beating performance. But though this stock is still priced high and the short-term outlook is uncertain, the reasons to own Visa for the long haul are more relevant than ever. 

Someone pictured off screen holding a credit card and inputting its information into a laptop.

Image source: Getty Images.

A path riddled with potholes

While forecasts change, COVID-19 has become a force majeure for Visa and what was previously an outlook for low- to mid-teens percentage increases for revenue and earnings in 2020. Those expectations should be tempered -- if not thrown out entirely -- and Visa prepped investors accordingly in an update filed with the Securities and Exchange Commission at the end of March. From March 1 to March 28, total processed transactions fell 2% compared to the same period in 2019 -- including a 4% decrease in U.S. payment volume and a 19% decrease in cross-border volume.

That's the bad news. The good news is that total processed transactions still rose 9% during the first quarter. So while there has been a decrease in activity, Visa said it expects revenue to be up by mid-single-digit percentages compared with the same period in 2019, and earnings to be up that much or a little more. The recent acquisition of Plaid and other fintech investments help, but it's ultimately a testament to the strength of Visa's leading digital payment platform and the high profit margins it generates -- 66.7% operating profit margin, to be exact, over the trailing 12 months.

In fact, Visa has consistently generated operating profit margin over 50% for over a decade, and margins have consistently surpassed 60% in recent years as digital payment adoption has grown. While the company will no doubt face some headwinds due to a slowdown in economic activity in the next couple of quarters, this tech titan has plenty of wiggle room to navigate the crisis while simultaneously investing for future growth.

The war on cash is still being won

The ability to deal with the current situation is important, as cash remains the primary means of transacting business around the globe. But tech companies like Visa continue to chip away at that trend. Researcher McKinsey has forecast that digital payment revenues will average about a 7% a year increase through 2023. With data security and other fintech services riding sidecar to its bread-and-butter payment tollbooth business, that bodes well for Visa over the long term in the war on cash. It will be disruptive in the short term, but COVID-19 appears to be forcing the world even further down the road of digital. 

At the end of 2019, Visa reported $12.7 billion in cash and investments on the books and $13.7 billion in long-term debt. Paired with those incredibly high profits, this company is both nimble enough to navigate a recession and to remain an ardent acquirer of high-growth fintech firms. The stock is still trading at a premium 27.8 times trailing 12-month free cash flow, but it's worth the price tag given the long-term trend toward electronic payments and Visa's leadership in the industry. For investors in it for the next decade, this stock is a buy.