V – Market expectations are for Uniform ROA expansion, but management may have concerns about their growth and their products and services

Visa Inc. (V) currently trades above corporate, but below recent averages relative to Uniform earnings, with a 27.6x Uniform P/E (Fwd. V/E’).

At these levels, markets are pricing in expectations for Uniform ROA to expand to 58%, accompanied by 7% Uniform asset growth.

Given the firm’s potential in the digital payments market, there is fundamental potential for stronger-than-priced-in performance.

If the company can execute its strategy in the digital payments space, it could drive Uniform ROA to 80% with 15% Uniform asset growth going forward, which would imply a stock price closer to $409, representing significant equity upside for the firm.

Moreover, the firm’s most recent earnings call suggests management may have concerns about their growth and their products and services.