Key Takeaways
- Visa reports fiscal fourth-quarter results on Oct. 27, after a run to a record high and with Washington threatening its fees.
- The real test is the fiscal 2027 outlook. It needs to back the Street’s call for about 14% EPS growth, with expenses growing slower than revenue.
- Visa’s operating margin has held near 67% for five fiscal years, but expenses grew faster than revenue in the first nine months of fiscal 2026.
- At 28x forward earnings, above its five-year average of 27x, the stock needs that growth to hold, and the Nov. 3 midterms will decide whether the swipe-fee bill moves.
Visa (V) ran to a record high this month, even though President Trump has promised to sign a bill that would let merchants send credit card sales over rival networks.
Now Visa has to show the growth behind that price. It reports fiscal fourth-quarter results on Tuesday, Oct. 27, after the close.
A beat may not be enough
Friday showed how high the bar is. American Express beat Wall Street’s earnings estimate and raised the low end of its full-year forecast, and its stock still fell. Visa and Mastercard slipped with it.
So the quarter matters less than what management says about the year ahead. Visa gave its first fiscal 2026 outlook on last October’s fourth-quarter call, and investors will expect the same for fiscal 2027.
The Street wants 14% more
Fiscal 2026 ended on Sept. 30. Analysts expect normalized EPS of $13.23 for it, up 15% from $11.47 in fiscal 2025. For fiscal 2027, the consensus of 40 analysts is $15.02, another 14%.
Those estimates have edged up over the past year. The fiscal 2027 figure stood at $14.47 at the end of September 2025. An outlook that points below $15.02 would undo that progress.
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The margin has stopped expanding
Expenses are the part to watch. Visa’s operating margin has held at about 67% for five straight fiscal years.
This year it slipped a little. On Visa’s adjusted basis, operating margin was 67.8% in the first nine months of fiscal 2026, against 68.3% a year earlier, as expenses grew 17% and revenue 15%. Management ties part of that expense growth to the World Cup marketing campaigns it ran for clients, and fiscal 2027 has no FIFA tournament.
The margin also leans on pricing. In the fiscal third quarter, service revenue grew 14% while payments volume grew 9%, and management named pricing as one of the drivers. The routing bill would hit that pricing directly: competing networks would cut into the fees Visa charges.
Investors are already paying for it
At its record high, Visa trades at 28x forward earnings. That’s above its five-year average of 27x, though well short of its 34x peak in October 2021.
The multiple was 23x at the end of March, and estimates have risen only modestly since then. Most of the stock’s gain has come from investors paying more for each dollar of earnings.
Washington votes a week later
Even a strong outlook may not settle much. The midterms are Nov. 3, a week after the report. On Oct. 19, Trump pledged to sign the bill if voters elect a Republican Congress, and merchants’ lobbyists reportedly want it attached to other legislation after the vote. The bill has stalled since 2022, and in March the Senate passed a housing bill without the routing amendment its sponsors wanted.
My take: an outlook that backs the Street’s $15.02, with expenses guided to grow slower than revenue, is enough to justify Visa at 28x. A guide that relies on pricing while the World Cup boost fades would leave the stock with little support heading into the vote.
Of course, the result on Nov. 3 could move the stock more than anything management says on Oct. 27.
So what is Visa stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
