Visa (V -0.14%) is a behemoth in the world of finance. It has a presence in more than 200 countries and territories, showcasing its impressive reach. And it's a business that provides a mission-critical function for its stakeholders.
Since the company's initial public offering in 2008, Visa has generated a monster total return of 2,700% (as of Aug. 25). The business certainly has a compelling bull case, even at its current massive scale. But if you were to buy $10,000 worth of this stock in 2025, would you become a millionaire in 10 years?
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Steady financial results
Visa continues to post steady financial results each quarter, which makes it stand out among the field of other businesses out there. Companies are worried about tariffs, inflationary pressures, or other macro- and industry-related issues. But Visa's operations keep humming along, which investors might take for granted.
During the latest fiscal quarter (Q3 2025 ended June 30), the business collected net revenue of $10.2 billion (up 14% year over year) and registered non-GAAP earnings per share of $2.98 (up 23%). These upbeat results were driven by 8% greater payments volume and 10% more transactions being processed.
"Consumer spending remains resilient, with continued strength in discretionary and non-discretionary growth in the U.S.," CEO Ryan McInerney said.
Visa's best characteristics
I think every long-term investor who intends to own businesses for at least five or 10 years should have Visa on their radar. There are some clear reasons why this is an outstanding company.
Visa's profitability is hard to overlook. In the past decade, the company's operating margin has averaged 66.5%. As a scaled payment platform, with large fixed costs, it's able to produce significant earnings. And because there are minimal capital expenditure requirements, free cash flow is also robust. This gives management the resources to return capital to investors, with $4.8 billion going to share repurchases and $1.2 billion being paid out as dividends just in the last three months.
Based on its long history of financial success, Visa has built up a wide economic moat. The key facet of this is the presence of a powerful network effect, which is another reason this is a high-quality company. There are 150 million merchant locations that accept the 4.8 billion active Visa cards out there. As the number of merchants and cards increases, so too does the value of the network.
This setup makes Visa's competitive position almost insurmountable by any challenger. In order for a competing payment platform to eat away at Visa's dominance and find any level of success, it would probably need to provide a 10-fold improvement for all parties involved, including merchants, consumers, and banks. It's not an easy task to make a dent in a system that's already so entrenched in our economy.
Great business, but what about the stock?
Visa is obviously a great business. Because of this, investors should keep it on their watch lists. It's not a no-brainer buying opportunity today, though. The price-to-earnings ratio of 34.1 is near a three-year high, hinting that maybe the stock is expensive.
The company's market cap is $672 billion. And according to Wall Street consensus analyst estimates, Visa's earnings per share will increase at a compound annual rate of 12.9% between fiscal 2024 and fiscal 2027. I believe a double-digit yearly clip beyond that is still a reasonable forecast. That's solid growth, although it's definitely not enough to drive huge gains in the share price, especially at the current scale.
I have complete confidence that investors will not become millionaires by investing $10,000 in this card giant and waiting until 2035. In fact, you won't achieve this return from any one investment opportunity in that time period. However, Visa is still a wonderful company to keep tabs on. If the valuation drops noticeably, then it might make sense to buy shares.
