Visa: peak returns on equity is a poor entry point
Quality is not in dispute. The price assumes the current return on equity is the through-cycle number, and it is not.
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Discussion · 8
Finally someone put numbers on this. The depreciation schedule really is the whole disagreement. What does the bear actually have to be right about?
That is the right objection. The comp table took longer than the rest of the piece put together, so I am glad it was the useful part.
This is the clearest write-up I have seen on the name. The channel data is what makes this hard to dismiss. Would you underwrite this without the catalyst date?
Partly yes. I would size it smaller at a higher entry rather than skip it, because the asymmetry degrades gradually rather than cliff-edges.
Thanks for showing the workings. The cohort split is the detail that everyone leaves out. Does the same logic apply to the closest comparable?
I hold the other side of this. The comp table did more work for me than the narrative did. How much of this do you think is already in the buy side's numbers?
Been long since the last one. The utilisation assumption is where I disagree. Does the thesis survive a soft guide next quarter?
This is the second-order point everyone skips. Second source in a constrained market is genuinely underrated. How are you thinking about the timing risk here?