Visa Inc. (NYSE:V)

The financial data reveals several key trends regarding market value and invested capital over the six-year period ending September 30, 2022.

Market (fair) value

The market value of Visa displayed a consistent upward trend from 2017 through 2020, rising from approximately $268.9 billion to $471.1 billion. This represents a significant growth over the initial four-year span. However, beginning in 2021, the market value declined slightly to about $451.2 billion and remained virtually unchanged in 2022 at $451.1 billion. This plateau suggests a possible stabilization or market revaluation after the prior period of robust growth.

Invested capital

Invested capital fluctuated moderately throughout the period. It started at around $51.1 billion in 2017, decreased to approximately $47.6 billion in 2018, and then increased again reaching a peak near $61.5 billion in 2020. In 2021 and 2022, the invested capital remained relatively steady, around $60.8 billion and $61.0 billion respectively, indicating a period of capital stabilization following an increase in earlier years.

Market Value Added (MVA)

MVA showed considerable growth from 2017 until 2020, increasing from approximately $217.8 billion to $409.6 billion. This reflects significant value creation relative to the invested capital. However, similar to the trend observed in market value, MVA declined slightly in 2021 to about $390.4 billion and remained stable in 2022 at roughly $390.1 billion. The decline suggests a moderation in the premium investors attribute beyond the invested capital after years of strong appreciation.

Overall, the data indicates substantial growth in market valuation and value creation up to 2020. From 2021 onward, the metrics indicate a leveling off in market value and value added, with invested capital remaining stable. This pattern could indicate a mature phase in the company's financial performance or market conditions leading to a reassessment of the growth prospects reflected in the valuation.

The financial data indicates a general upward trend in market value added (MVA) from 2017 through 2020, starting at approximately 217.8 billion US dollars in 2017 and rising to a peak of about 409.6 billion US dollars in 2020. Following this peak, the MVA experienced a slight decline, decreasing to around 390.4 billion in 2021 and remaining nearly stable in 2022, at approximately 390.1 billion US dollars.

Invested capital shows a fluctuating, yet moderately increasing pattern over the six-year period. Beginning at 51.1 billion US dollars in 2017, it decreased to approximately 47.6 billion US dollars in 2018, then increased again to nearly 50.9 billion in 2019. From 2019 onwards, there was a more evident rise to 61.5 billion in 2020, followed by a small decrease and stabilization around 60.8 to 61 billion US dollars in 2021 and 2022 respectively.

The MVA spread ratio, which reflects the return over invested capital relative to the invested capital base, rose sharply from 426.48% in 2017 to a peak in 2019 of about 695.79%. This elevated level slightly contracted in 2020 to 665.77%, and continued a gradual decline thereafter, settling around 641.98% in 2021 and 639.72% in 2022. Despite this downward trend post-2019, the ratio remains significantly higher than the 2017 level, indicating continued strong value creation relative to the capital invested.

In summary, the period from 2017 to 2019 was characterized by rapid growth in both market value added and the MVA spread ratio, signaling increasing efficiency and value generation relative to invested capital. The years 2020 to 2022 saw a stabilization or slight decline in these metrics, while invested capital showed moderate growth with a degree of fluctuation. This may reflect changing market conditions or strategic adjustments impacting capital allocation and value creation dynamics.

Market value added (MVA)

The market value added exhibited a steady increase from 2017 through 2020, rising from approximately 217.8 billion US dollars to about 409.6 billion US dollars. However, after reaching this peak in 2020, it decreased slightly in 2021 and remained almost stable in 2022 at around 390.1 billion US dollars. This suggests a period of significant growth followed by a plateau and marginal decline in market value within the latter two years.

Net revenues

Net revenues showed a consistent upward trend overall, starting at 18.4 billion US dollars in 2017 and growing steadily through 2019 to reach 22.9 billion. There was a slight dip observed in 2020 with revenues falling to 21.8 billion, likely influenced by external factors during that year. Subsequently, revenues rebounded and climbed to 24.1 billion in 2021 and further accelerated to 29.3 billion in 2022, representing robust revenue growth in the final two years.

MVA margin

The MVA margin, representing the ratio of market value added to net revenues, demonstrated a consistent increase from 1186.67% in 2017 to a peak of 1874.98% in 2020. After 2020, the margin declined notably to approximately 1619.41% in 2021 and further to 1330.97% in 2022. This indicates that while market value added initially grew at a faster pace relative to net revenues, the efficiency of converting revenues into market value diminished following 2020.

Summary of trends

Overall, the data displays a pattern of strong growth in market value added and net revenues from 2017 to 2020, followed by stabilization or slight declines in market value added and accelerated revenue growth in the subsequent two years. The MVA margin reflects a peak in value creation efficiency in 2020, with a decline thereafter possibly pointing to changing market conditions or increased revenue base not matched by proportional growth in market valuation.