Visa's Growth Strategy Undergoes Shift in Focus

Visa's management has changed its growth story over the past two years. The company's shares trade at 31 times earnings, a premium to the S&P 500's price-to-earnings ratio of 22.4.

The growth in commercial payments and Visa Direct money transfers used to be highlighted as 'new flows.' In fiscal Q4 2024, new flows revenue grew 22% year-over-year in constant dollars. However, the last reported growth rate for this business is from fiscal Q1 2025, where it reached 19%. Since then, management has stopped highlighting new flows.

New flows revenue now falls under commercial and money movement solutions, which grew 17% in fiscal Q3 2026. Value-added services, such as advisory and marketing services, have taken center stage with a growth rate of 34% in constant dollars to $3.8 billion. Agentic commerce and stablecoins are also being emphasized by management.

The shares' high price assumes continued growth from the commercial payments and Visa Direct segments. The concern is that the growth mix may not last, and the company's price has lagged the S&P 500 over the past year. A $10,000 holding in Visa (V) a year ago would be worth about $10,950 as of September 24, compared to around $11,710 for the same sum invested in the S&P 500.