What Is The Real Value Of Visa Inc (V) Using A Simple DCF

Johnny HopkinsStock ScreenerLeave a Comment

As part of a new series, each week we typically conduct a DCF on one of the companies in our screens. However, this week we thought we’d take a look at one of the stocks that is not in our screens. The stock is Visa Inc (V).


Visa is the largest payment processor in the world. In fiscal 2022, it processed over $14 trillion in total volume. Visa operates in over 200 countries and processes transactions in over 160 currencies. Its systems are capable of processing over 65,000 transactions per second.

Recent Performance

Over the past twelve months the share price is up 22.06%.

V Chart

V data by YCharts


  • Discount Rate: 6%
  • Terminal Growth Rate: 2%
  • WACC: 6%

Forecasted Free Cash Flows (FCFs)

Year FCF (billions)
2023 17
2024 18.7
2025 20.6
2026 22.7
2027 25

Terminal Value

Terminal Value = FCF * (1 + g) / (r – g) = 637.5 billion

Present Value of Terminal Value

PV of Terminal Value = Terminal Value / (1 + WACC)^5 = 476.38 billion

Present Value of Free Cash Flows

Present Value of FCFs = ∑ (FCF / (1 + r)^n) = 86.64 billion

Enterprise Value

Enterprise Value = Present Value of FCFs + Present Value of Terminal Value = 563.02 billion

Net Debt

Net Debt = Total Debt – Total Cash = 6.76 billion

Equity Value

Equity Value = Enterprise Value – Net Debt = 556.26 billion

Per-Share DCF Value

Per-Share DCF Value = Enterprise Value / Number of Shares Outstanding = $297.46


DCF Value Current Price Margin of Safety
$297.46 $245.80 17.37%

Based on the DCF valuation, the stock is currently undervalued. The DCF value of $297.46 per share is higher than the current market price of $245.80. The Margin of Safety is 17.37%.

It is important to note that this valuation is based on a number of assumptions, and these assumptions could change in the future. This valuation is meant to be a back-of-the-envelope analyse that could be used as a starting point in a much more thorough valuation process. As a result, it is important to do your own research before making any investment decision.

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