Visa Posts Narrow Earnings Beat, Guides for Slower Growth in Fiscal 2027

Visa Inc. (V) reported fiscal fourth-quarter earnings that slightly beat Wall Street estimates, aided by a lower-than-expected tax rate from legal settlements. The payments giant's forecast for decelerating growth in the upcoming fiscal year, however, led to a muted stock reaction.

Quarterly Performance and Full-Year Strength

For the fourth quarter ended in September, Visa posted adjusted earnings per share (EPS) of $3.48 on revenue of $12.10 billion. This narrowly surpassed consensus estimates of $3.44 for EPS and $12.09 billion for revenue, according to data from Investing.com. Management noted on its Oct. 27 earnings call that a tax rate of 18.4%, lower than anticipated due to legal settlements, contributed to the earnings beat.

The results capped a strong fiscal 2026 for the company. Full-year net revenue grew 15% to $46 billion, which the company highlighted as its strongest annual growth in over 15 years, excluding the post-pandemic rebound and acquisitions. Key business metrics remained robust in Q4, with payments volume up 9% in constant dollars and cross-border volume excluding intra-Europe rising 14%.

Outlook Signals Deceleration

Looking ahead to fiscal 2027, Visa's management guided for a slowdown. The company projects low double-digit net revenue growth and low-teens EPS growth. This marks a step down from the 15% revenue and 16% EPS growth reported for fiscal 2026.

Ad

Company executives also flagged rising expenses, including higher client incentive costs tied to renewal activity and continued investment spending, which could potentially limit margin expansion. Following the report, Visa's shares fell about 1.3% in after-hours trading before recovering those losses in the subsequent regular session.

Key Factors for Investors

Despite the moderating growth forecast, several areas remain key for investors. Visa's value-added services segment continues to be a significant growth engine, with revenue expanding 30% in constant dollars for the full year. Analysts at TD Cowen, who raised their price target on the stock to $450 from $420, expect this segment's growth to remain above 20%.

Visa also continues to return significant capital to shareholders. In the fourth quarter, it executed $4 billion in stock buybacks and paid $1.3 billion in dividends, with $24.4 billion still available under its current repurchase authorization. However, trading at a price-to-earnings ratio of approximately 34 and near its 52-week high, the stock's valuation remains a central consideration for the market.