Is Visa, Inc. overvalued or undervalued?

As of 25 October 2022, the valuation grade for Visa, Inc. moved from attractive to fair, indicating a shift in its perceived value. Based on the current metrics, Visa appears to be fairly valued. The company has a P/E ratio of 34, a Price to Book Value of 18.88, and an EV to EBITDA ratio of 27.23, which are relatively high compared to its peers. For instance, Mastercard, Inc. has a significantly higher P/E ratio of 58.32, while PayPal Holdings, Inc. shows a much lower P/E of 15.30, highlighting Visa's position in the market.
In terms of recent performance, Visa's stock has returned 17.23% over the past year, slightly outperforming the S&P 500's return of 17.14%. However, over longer periods, such as the 5-year return, Visa has underperformed with a return of 66.91% compared to the S&P 500's 96.61%. This suggests that while Visa is currently fairly valued, its growth potential may be limited relative to broader market performance.