V – Market expectations are for Uniform ROA to expand to new peaks, but management may be concerned about marketing, VisaNet, and Payworks
September 11, 2019
Visa Inc. (V:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) Earnings, with a 30.4x Uniform P/E, implying bullish expectations for the firm. However, management may be concerned about their marketing investments, VisaNet, and their Payworks acquisition
Specifically, management may be concerned about further expense growth, and they may lack confidence in the effectiveness of their marketing investments. Furthermore, they may be exaggerating the security and ease of use of their Secure Remote Commerce platform, and may be concerned about their ability to continue enabling electronic payments. Moreover, they may lack confidence in their ability to make VisaNet the best electronic payment method, and may be exaggerating the value of their Earthport, Verifi, and Paywoks acquisitions. Finally, they may be exaggerating the value of their partnerships with Gojek, PayPal, and Rappi.