Wells Fargo’s Best Growth Stocks: 28 Stocks With The Highest Consensus EPS Growth Estimates

19. Visa Inc. (NYSE:V)

Consensus Long-Term EPS Growth Estimate: 13%

Number of Hedge Fund Holders: 163

Visa Inc. (NYSE:V) is the largest payment processing company in the US. It holds 52% market share of the US credit card market and 47% of all the outstanding balances. This makes Visa Inc. (NYSE:V) a key player in the US financial system, and it also offers the firm a wide moat over its nearest rival, Mastercard. Like other payment processors, the firm is also dependent on consumer spending since its business model relies on taking a percentage of all transactions as fees. Consequently, Visa Inc. (NYSE:V) does well when the economy is strong, and recent economic turmoil has also forced the firm to diversify. During its third quarter, the firm’s value-added services revenue and new flows grew by 22% to reduce its dependence on existing customers. However, Visa Inc. (NYSE:V)’s payment fee model also creates troubles as evidenced by the $30 billion settlement it and Mastercard have agreed to with merchants. Should merchants switch en-masse from its products, then the firm could face headwinds.

Another looming threat is Visa Inc. (NYSE:V)’s market share attracting regulatory action. Here’s what management had to say during the fiscal Q4 2024 earnings call about one such action against it by the Justice Department:

“Before I close, I wanted to make a few comments on the recent lawsuit by the Department of Justice. We believe the lawsuit is meritless and shows a clear lack of understanding of the payments ecosystem in the United States.

We will defend ourselves vigorously and are confident in our ability to demonstrate that Visa competes for every transaction in a thriving debit space that continues to grow and see new entrants.”