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Visa's Solid Q3 Momentum Meets a Puzzling Pullback: Right Time to Buy?
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Key Takeaways
Visa's Q3 EPS rose 23.1% to $2.98, topping estimates, with revenues rising 14.3% to $10.2 billion.
Cross-border volumes climbed 12% and processed transactions rose 10% year over year.
Visa returned $6B to shareholders, including $4.8B in buybacks and $1.2B in dividends.
Visa Inc. (V - Free Report) , the global payments technology leader, posted another robust quarterly performance in the third quarter of fiscal 2025, fueled by resilient consumer spending and strong growth in cross-border transactions. The company saw healthy gains in processed transactions, value-added services, and total payment volumes, underscoring the strength of its vast global network and the accelerating adoption of digital payments.
However, since reporting results on July 29, the stock has fallen 5.5%, pulling it away from its 52-week high of $375.51. This raises a key question for investors: Is the stock’s recent dip a sign of weakness or simply a pause in an otherwise strong growth story?
Key Highlights From Visa’s Q3 Earnings
Earnings & Sales Beat: Visa’s EPS of $2.98 beat the Zacks Consensus Estimate by 4.2% and grew 23.1% year over year. Also, the top line of $10.2 billion beat the consensus mark by 3.1% and improved 14.3% from a year ago.
Major Metrics Remain Solid: Processed transactions grew 10% year over year to 65.4 billion and beat our model estimate. On a constant-dollar basis, cross-border volumes surged 12% year over year, as travel activity continued to gain momentum. Also, its payment volumes grew 8% year over year on a constant-dollar basis.
Visa Stays Resilient: Despite macro headwinds, such as inflation, lower household savings, recession concerns and tariff-related volatility, Visa’s transaction-based business model, less dependent on specific spending categories, has kept its performance resilient.
Visa’s competitive advantage stems from powerful network effects, where increased adoption by consumers and businesses strengthens both scale and profitability. Backed by robust cash flows, the company continues to invest in infrastructure, marketing and innovation, reinforcing its long-term edge. With global digital payment adoption accelerating, Visa’s $626.9 billion market cap and dominant international presence leave it well-positioned for sustained growth.
Visa Continues to Reward Shareholders
Shareholder returns remain a priority. During the quarter, Visa returned $6 billion to investors, including $4.8 billion in share repurchases and $1.2 billion in dividends. As of June 30, 2025, $29.8 billion remained under its buyback authorization. The dividend yield stands at 0.71%, above the industry average of 0.65%, and the company has a consistent record of dividend increases.
Favorable Estimates for Visa
Analyst sentiment is notably positive. The Zacks Consensus Estimate for Visa’s fiscal 2025 and fiscal 2026 EPS implies a 13.6% and 12.4% uptick, respectively, on a year-over-year basis. Similarly, the consensus mark for fiscal 2025 and fiscal 2026 revenues suggests a 10.8% and 10.9% increase, respectively. It has seen multiple upward estimate revisions in the past month.
The company beat earnings estimates in each of the past four quarters, with an average surprise of 3.9%.
The company’s value-added services, including fraud prevention, analytics and advisory solutions, generated $2.8 billion in fiscal Q3 revenues, up 26% year over year in constant dollars. Visa is advancing in digital wallets and crypto-related payment solutions through partnerships with fintechs and stablecoin settlement trials for cross-border payments.
Recent initiatives include adding support for USD-backed stablecoins Global Dollar (USDG) and PayPal USD (PYUSD) via a Paxos partnership, integrating the euro-backed stablecoin EURC, and expanding blockchain support to Stellar and Avalanche alongside Ethereum and Solana. These steps enable Visa to handle settlements across four stablecoins and four blockchains.
Visa’s Price Performance & Valuation
Year to date, Visa shares are up 5.1%, ahead of the industry’s 1.7% gain but trailing the S&P 500’s 7.7% rise. By comparison, among its peers, Mastercard Incorporated (MA - Free Report) has gained 6.6%, while American Express Company (AXP - Free Report) has slipped 0.7%.
However, Visa’s premium valuation could temper near-term upside, with the stock trading at 26.28X forward price/earnings versus the industry average of 21.37X.
Image Source: Zacks Investment Research
Meanwhile, Mastercard and American Express are currently trading at 31.57X and 17.82X, respectively.
Visa’s Hurdles
Risks remain. Regulatory challenges loom, including a U.S. Department of Justice antitrust lawsuit and potential legislative changes such as the Credit Card Competition Act. Visa and Mastercard are also facing legal challenges in the U.K. over merchant fees, with London’s Competition Appeal Tribunal recently ruling that their multilateral interchange fees violate European competition law.
Additionally, rising expenses pose a challenge. Adjusted operating expenses increased 13% year over year to $3.3 billion in the fiscal third quarter, driven by higher marketing, professional and personnel costs. Client incentives (which reduce net revenues) increased 12.5% to $3.97 billion.
Final Verdict: Hold Visa Now
Visa’s latest results reaffirm the company’s strong fundamentals, resilient business model, and growth opportunities in digital payments and value-added services. Its robust network effects, expanding innovation initiatives, and consistent shareholder returns provide a solid long-term foundation. However, near-term headwinds — ranging from regulatory scrutiny and rising expenses to a premium valuation — may limit upside potential. With the stock trading above industry averages and recent price performance lagging the broader market, a balanced view is warranted.
Against this backdrop, Visa carries a Zacks Rank #3 (Hold), suggesting that investors may want to maintain positions while awaiting a more attractive entry point or clearer catalysts for the next leg higher. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Visa's Solid Q3 Momentum Meets a Puzzling Pullback: Right Time to Buy?
Key Takeaways
Visa Inc. (V - Free Report) , the global payments technology leader, posted another robust quarterly performance in the third quarter of fiscal 2025, fueled by resilient consumer spending and strong growth in cross-border transactions. The company saw healthy gains in processed transactions, value-added services, and total payment volumes, underscoring the strength of its vast global network and the accelerating adoption of digital payments.
However, since reporting results on July 29, the stock has fallen 5.5%, pulling it away from its 52-week high of $375.51. This raises a key question for investors: Is the stock’s recent dip a sign of weakness or simply a pause in an otherwise strong growth story?
Key Highlights From Visa’s Q3 Earnings
Earnings & Sales Beat: Visa’s EPS of $2.98 beat the Zacks Consensus Estimate by 4.2% and grew 23.1% year over year. Also, the top line of $10.2 billion beat the consensus mark by 3.1% and improved 14.3% from a year ago.
Major Metrics Remain Solid: Processed transactions grew 10% year over year to 65.4 billion and beat our model estimate. On a constant-dollar basis, cross-border volumes surged 12% year over year, as travel activity continued to gain momentum. Also, its payment volumes grew 8% year over year on a constant-dollar basis.
Visa Stays Resilient: Despite macro headwinds, such as inflation, lower household savings, recession concerns and tariff-related volatility, Visa’s transaction-based business model, less dependent on specific spending categories, has kept its performance resilient.
For more insights, read our blog: Visa Q3 Earnings Beat Estimates on Strong Cross-Border Volumes.
Visa’s Network Strength
Visa’s competitive advantage stems from powerful network effects, where increased adoption by consumers and businesses strengthens both scale and profitability. Backed by robust cash flows, the company continues to invest in infrastructure, marketing and innovation, reinforcing its long-term edge. With global digital payment adoption accelerating, Visa’s $626.9 billion market cap and dominant international presence leave it well-positioned for sustained growth.
Visa Continues to Reward Shareholders
Shareholder returns remain a priority. During the quarter, Visa returned $6 billion to investors, including $4.8 billion in share repurchases and $1.2 billion in dividends. As of June 30, 2025, $29.8 billion remained under its buyback authorization. The dividend yield stands at 0.71%, above the industry average of 0.65%, and the company has a consistent record of dividend increases.
Favorable Estimates for Visa
Analyst sentiment is notably positive. The Zacks Consensus Estimate for Visa’s fiscal 2025 and fiscal 2026 EPS implies a 13.6% and 12.4% uptick, respectively, on a year-over-year basis. Similarly, the consensus mark for fiscal 2025 and fiscal 2026 revenues suggests a 10.8% and 10.9% increase, respectively. It has seen multiple upward estimate revisions in the past month.
The company beat earnings estimates in each of the past four quarters, with an average surprise of 3.9%.
Visa Inc. Price, Consensus and EPS Surprise
Visa Inc. price-consensus-eps-surprise-chart | Visa Inc. Quote
Visa’s Diversification & Innovation Efforts
The company’s value-added services, including fraud prevention, analytics and advisory solutions, generated $2.8 billion in fiscal Q3 revenues, up 26% year over year in constant dollars. Visa is advancing in digital wallets and crypto-related payment solutions through partnerships with fintechs and stablecoin settlement trials for cross-border payments.
Recent initiatives include adding support for USD-backed stablecoins Global Dollar (USDG) and PayPal USD (PYUSD) via a Paxos partnership, integrating the euro-backed stablecoin EURC, and expanding blockchain support to Stellar and Avalanche alongside Ethereum and Solana. These steps enable Visa to handle settlements across four stablecoins and four blockchains.
Visa’s Price Performance & Valuation
Year to date, Visa shares are up 5.1%, ahead of the industry’s 1.7% gain but trailing the S&P 500’s 7.7% rise. By comparison, among its peers, Mastercard Incorporated (MA - Free Report) has gained 6.6%, while American Express Company (AXP - Free Report) has slipped 0.7%.
YTD Price Performance Comparison – V, MA, AXP, Industry & S&P 500
However, Visa’s premium valuation could temper near-term upside, with the stock trading at 26.28X forward price/earnings versus the industry average of 21.37X.
Meanwhile, Mastercard and American Express are currently trading at 31.57X and 17.82X, respectively.
Visa’s Hurdles
Risks remain. Regulatory challenges loom, including a U.S. Department of Justice antitrust lawsuit and potential legislative changes such as the Credit Card Competition Act. Visa and Mastercard are also facing legal challenges in the U.K. over merchant fees, with London’s Competition Appeal Tribunal recently ruling that their multilateral interchange fees violate European competition law.
Additionally, rising expenses pose a challenge. Adjusted operating expenses increased 13% year over year to $3.3 billion in the fiscal third quarter, driven by higher marketing, professional and personnel costs. Client incentives (which reduce net revenues) increased 12.5% to $3.97 billion.
Final Verdict: Hold Visa Now
Visa’s latest results reaffirm the company’s strong fundamentals, resilient business model, and growth opportunities in digital payments and value-added services. Its robust network effects, expanding innovation initiatives, and consistent shareholder returns provide a solid long-term foundation. However, near-term headwinds — ranging from regulatory scrutiny and rising expenses to a premium valuation — may limit upside potential. With the stock trading above industry averages and recent price performance lagging the broader market, a balanced view is warranted.
Against this backdrop, Visa carries a Zacks Rank #3 (Hold), suggesting that investors may want to maintain positions while awaiting a more attractive entry point or clearer catalysts for the next leg higher. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.