Visa's Falling Multiple Hinges on Assumed Margin Expansion

Visa's stock has been lagging behind the market for a year, with a return of about 9.5% over the trailing twelve months compared to 23.3% for the S&P 500.

The company's forward numbers appear reasonable at first glance, but they rely on an assumption that profitability will continue to climb despite Visa currently spending heavily to grow.

Consensus estimates suggest earnings growth of about 9.4% a year over the two years to fiscal 2027 and revenue growth of around 6.8%, which assumes profit margins will keep expanding.

This assumption is critical, as it underpins the discount at which Visa's stock trades.

In reality, margin has been drifting in the other direction, with operating expenses rising faster than net revenue in fiscal Q3 2026.