Buffett Brain · Research note
Score updated 26 Sept 2026 · analysis from 1 Jun 2026
V· Financial Services
Visa
Visa is one of the finest toll bridges ever built, earning a 61% operating margin, yet the market is asking 27.7 times earnings to cross it.
Buffett fit
Strong fit
Owner
96
Durability
98
Management
63
Price
23
Score updated 26 Sept 2026 · analysis from 1 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Financial Services stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned the whole of Visa, I would be delighted with what management hands me.
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This is the rare franchise that gets stronger the bigger it gets. More cardholders draw more merchants, and more merchants draw more cardholders, a flywheel that a 98 durability reading reflects.
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Management is shrinking the share count by about 2.3% a year, so each remaining share owns a larger slice of a growing pie.
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Here is where my enthusiasm cools. At 27.7 times earnings the owner-earnings yield is only 3.5%, which is what you would pocket as an owner before any growth, and that is a thin starting return for a stock, richer than a long bond but with real downside if growth slows.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
7- 1 of 61% and of 81% show a near costless toll booth that keeps almost every extra dollar of revenue
- 2 of 32.7% trailing and 28.1% over five years proves the network earns far above its cost of capital
- 3Network effects compound as each new cardholder and merchant makes the system more valuable, reflected in a 98 durability score
- 4 at 1.08 times net income confirms the reported earnings convert fully into real, spendable cash
Concerns
7- 1The price is the problem, at 27.7 times earnings the owner-earnings yield is just 3.5%, leaving almost no
- 2An EV to of 26 means you are paying a premium multiple that demands many years of strong growth simply to justify today's quote
- 3Repurchasing shares at 27.7 times earnings is far less value accretive than buying back stock when it is cheap
- 4Regulatory pressure on interchange fees and the rise of alternative payment rails could slowly reroute the tolls Visa collects
Price history
$361+56.6%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Visa runs the pipes between banks, merchants, and cardholders, taking a small cut of nearly every swipe that flows across its network. It does not lend money or take credit risk, it simply charges a toll, and the economics show it, with an 81% and a 61% . Revenue has compounded at about 13.5% a year and earnings per share at roughly 16%, because volume rises with commerce and prices drift up while costs barely move.
How this analysis has moved
The call has held across 2 reviews.
Sep 27, 2026 → Oct 4, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Financial Services
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