Is Visa Inc. Class A (V) overvalued?
On Equity Rank's model estimate, V trades 19% above its fair value. Visa Inc. Class A (V) last closed at $422.65; the multi-method model fair value is $356.45.
| Price | Model fair value | Price vs model |
|---|---|---|
| $422.65 | $356.45 | 19% above |
What the answer rests on
- 1 of 10 valuation methods put V's value above its price and 9 put it below, so the methods mostly agree.
- To justify today's price, V's free cash flow would need to grow about 11.8% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 3.9% a year.
- Over the past year the price sat below the model fair value on 7% of trading days. The gap ranged from 5% below to 50% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind V's fair value · What prices assume · Other companies