MA

Visa’s Free Cash Flow Margin Is Fantastic

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Image Source: TradingView By Brian Nelson, CFA Visa (V) recently reported first quarter fiscal 2026 results with revenue and non-GAAP earnings per share coming in better than expected. Net revenue increased 15%, or 13% on a constant-dollar basis, to $10.9 billion. GAAP net income came in at $5.9 billion, or $3.03 per share, up 17%, while non-GAAP net income came in at $6.1 billion or $3.17 per share, up 15%. Management had the following to say about the results: Visa delivered a very strong fiscal first quarter with net revenue up 15% year-over-year, GAAP EPS up 17% and non-GAAP EPS up 15%, driven by resilient consumer spending and a strong holiday season, as well as continued strength in value-added services … Read more

Visa Expects Low Double Digit Earnings Growth for Fiscal 2026

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Image Source: Visa By Brian Nelson, CFA On October 28, Visa (V) reported better than expected fourth quarter fiscal 2025 results with both revenue and non-GAAP earnings per share exceeding the consensus forecast. Net revenue increased 12%, or 11% on a constant currency basis, while non-GAAP net income increased 7% to $5.8 billion, or $2.98 per share, the latter up 10% and better than the $2.97 consensus. Payments volume increased 9% in the quarter, while total cross-border volume totaled 12%, with processed transactions increasing 10%. Visa’s management had the following to say about the results: In our fourth quarter, continued healthy consumer spending drove net revenue up 12% to $10.7 billion. For the full year, Visa delivered strong performance, with … Read more

Thinking Slow: 3 Research Blind Spots That Changed the Investment World

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Dear members: — Daniel Kahneman in his text Thinking, Fast and Slow (1) divided the human psyche into two systems. The first system is instinctive and emotional, often set on autopilot, while the second system is slower and more logical, requiring a calculating conscious. Many of the maxims the investment world takes for granted today suffer from conclusions that are made rapidly, almost without thinking, driven by our first system, creating what I call research blind spots. — In World War II, Allied bombing raids were suffering from very high casualty rates. It was estimated that for those pilots that were flying at the beginning of the war, only about 10% survived, a terrible loss rate. Bombing was crucial to the Allied … Read more

Visa’s Fiscal Third Quarter Results Reveal Consumer Remains Resilient

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Image: Visa’s free cash flow generation remains phenomenal. By Brian Nelson, CFA On July 29, Visa (V) reported better than expected fiscal third quarter results with both revenue and GAAP earnings per share exceeding the consensus forecast. Net revenue increased 14%, while GAAP net income advanced 8% and GAAP earnings per share jumped 12%. Non-GAAP net income increased 19%, to $5.8 billion, while non-GAAP earnings per share increased 23%, to $2.98. Management had the following to say about the results: Visa delivered another strong quarter, with 14% net revenue growth, 12% GAAP EPS growth and 23% non-GAAP EPS growth. Healthy business driver trends continued through the quarter and into the first few weeks of July. Consumer spending remains resilient, with … Read more

3 Undervalued Stocks to Consider Buying Now

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Dear readers:   With the markets retracing most of their recent drawdown, we’re taking a victory lap as we didn’t panic, nor should have you. We highlighted our wait-and-see approach amidst the worst of the pullback, and we expect the Magnificent 7 (large cap growth and big cap tech) to continue to propel the markets higher, as they have done.   We’ve been busy rolling valuation models as we finetune our assumptions for a great number of companies under coverage. While doing so, we came across three undervalued stocks that are also included in the simulated newsletter portfolios. We think they’re prime for highlight.   The three stocks are UnitedHealth Group (UNH), Nvidia (NVDA) and Alphabet (GOOG). We spend a lot of time on discounted cash-flow valuation, … Read more

Magnificent 7 Earnings Reports Not Bad Thus Far

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By Brian Nelson, CFA   Shortly after Trump’s Liberation Day, where the President unveiled lofty tariffs on numerous countries, we released our wait-and-see outlook for the equity markets, which thus far has proven to be the right move, with the markets largely recovering from the depths reached in April. The S&P 500 (SPY), for example, is down just 3.3% year-to-date, excluding dividends.   A lot has happened since Liberation Day, including easing of tariffs to a 10% baseline for most, if not all, countries, with the key exception of China, where tariffs remain extremely elevated and prohibitive. Many countries are now reportedly negotiating trade agreements with the White House, and we expect China to be added to that list soon, even if … Read more

Visa’s Free Cash Flow Generation Remains Phenomenal

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Image: Visa continues to translate a high percentage of revenue into free cash flow generation. By Brian Nelson, CFA On April 29, Visa (V) reported better than expected second quarter fiscal 2025 results with non-GAAP earnings per share and revenue coming in higher than expected. Net revenue increased 9% in the quarter, or 11% on a constant dollar basis, while non-GAAP net income came in at $5.4 billion or $2.76 per share, the latter up 10% from the same quarter a year ago. The board of directors authorized a new $30 billion multi-year share repurchase program. Management had the following to say about the quarter: Visa’s strong 9% fiscal second quarter net revenue growth was driven by healthy trends in … Read more

Trump Tariffs Higher than Expected; What We’re Doing

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By Brian Nelson, CFA The Trump tariff increases came in larger than what we were expecting, and it remains to be seen how they will flow through the global economy, as we monitor potential retaliatory tariffs from other countries. As it relates to the equity markets, we’re taking a wait and see approach at the moment as we monitor new policy changes related to trade, immigration, fiscal (tax), and regulations. In short, we’re not overreacting to the sell off as we won’t have a great handle on the tariff impact to companies for a few quarters when they report results post-tariff increases. That said, we’re expecting continued market volatility, with meaningful risk to the downside, before trade uncertainty alleviates in … Read more

Keeping the Horse Before the Cart: Valuentum’s Economic Castle Rating

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Image Source: Ian By Brian Nelson, CFA “In business, I look for economic castles protected by unbreachable moats.” – Warren Buffett In the world of investing, no other saying may be more widespread. The teachings of Berkshire Hathaway’s (BRK.A, BRK.B) Warren Buffett have become a favorite among individual investors, having been adopted by money-management firms and sell-side firms alike in order to better connect with their clients and readers who have been ‘under siege’ by the topic in recent years. The phrase ‘economic moat’ – or sustainable competitive advantage – has simply become ubiquitous in the investment world and perhaps has lost much of its significance and meaning along the way. Most management teams across the globe are now eager … Read more

Mastercard’s Results Point to Continued Healthy Consumer Spending

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Image: Mastercard’s stock has done quite well since the beginning of 2022. By Brian Nelson, CFA Mastercard (MA) recently reported better than expected second quarter results with the firm’s revenue and non-GAAP earnings per share coming in higher than the consensus forecasts. Second quarter net revenue came in at $7 billion, up 11% year-over-year (13% on a currency-neutral basis) thanks to growth in its payment network and value-added services and solutions. Operating income came in at $4 billion, up from $3.7 billion in the same period a year ago. Its adjusted operating margin was an impressive 59.4% in the quarter. On a currency-neutral basis, non-GAAP net income advanced 24%, while adjusted diluted earnings per share increased 27%, bolstered in part … Read more