Visa (V -0.48%) continues posting strong financial results, as its fiscal 2023 third quarter (ended June 30) numbers show. The massive card network reported revenue of $8.1 billion and adjusted earnings per share (EPS) of $2.16, both up meaningfully compared to the year-ago period. Both figures also beat Wall Street forecasts.  

Despite having strong fundamentals, Visa has lagged the S&P 500 in 2023. Does that mean now is the right time to buy the top financial stock? Let's take a closer look. 

The latest numbers 

It's business as usual for Visa, which keeps humming along as if there isn't a ton of uncertainty surrounding the global economy. As I noted, both the top- and bottom-line metrics exceeded analyst estimates. In fact, this was the 13th straight quarter that Visa's EPS surprised to the upside. That's a phenomenal track record that's even more impressive when you consider that the last three years included the pandemic, supply chain issues, surging inflation, and rising interest rates. 

A key theme with Visa is the soaring growth of cross-border payments volume, which was up 17% year over year in Q3. That was much faster than payments volume growth of 9% for the overall company.  

"Summer travel across most regions picked up, with travel in and out of Asia seeing strong gains," CFO Vasant Prabhu highlighted on the earnings call. He also mentioned that while travel outbound from the U.S. is well above pre-pandemic levels, there is a lot of room for recovery for inbound travel to this country. 

Attractive qualities 

Besides having another strong quarterly performance under its belt, Visa possesses some tremendous characteristics that make it a worthy investment candidate. 

The most obvious is the company's network effects. As of March 31, there were 4.2 billion Visa cards in circulation across the globe. And there are more than 100 million merchant locations that are plugged into the Visa network. The sheer number of cards and merchants makes it almost impossible for rivals to compete. 

This economic moat has resulted in a truly incredible financial profile. In the latest quarter, Visa's operating income of $5 billion represented 62% of its revenue. That's astronomically higher than the 12% operating margin of the average company in the S&P 500. 

With that kind of outsize profitability, Visa produces a lot of free cash flow, to the tune of $13.1 billion through the first three quarters of fiscal 2023. And this has afforded it the opportunity to reduce its share count over the years, something management plans to keep doing. 

And you can't forget about Visa's growth prospects, helped by the war on cash. In the U.S., 58% of adults still make some or all of their purchases with cash. And in Europe, cash was used at checkout for 59% of transactions. This leaves plenty of room for Visa to expand its payments network in the decade ahead. 

What about the valuation? 

Solid financial results, network effects, and sizable growth potential might make Visa a no-brainer buy today, at least from a purely qualitative perspective. But it's worth taking the time to understand the valuation as well. 

Right now, the stock sells for a trailing price-to-earnings (P/E) ratio of 29.7. The valuation might be a bit pricey, especially in comparison to the broader S&P 500, which trades at a P/E multiple of 20.4. However, consider the fact that Visa's average P/E ratio over the past five years is 35.5, and over the past 10 years is 33.5. That makes the current valuation look attractive. 

Visa is without question one of the best companies in the world. That at least warrants the stock making it on your watch list, if not in your portfolio.