Visa Inc. (NYSE:V)

Over the analyzed periods, net cash provided by operating activities demonstrated a generally upward trend with some fluctuations. Starting at 9,208 million US dollars in September 2017, it increased significantly to 12,713 million US dollars by September 2018 and slightly further to 12,784 million in September 2019. A decline was observed in 2020, likely influenced by external economic factors, bringing the figure down to 10,440 million US dollars. However, a strong recovery occurred in the subsequent years, with operating cash flow rising to 15,227 million in 2021 and reaching the highest level of 18,849 million US dollars by September 2022.

Free cash flow to equity (FCFE) showed more volatility across the periods. It began at 10,974 million US dollars in 2017, decreased to 10,245 million in 2018, then increased to 12,028 million in 2019. A notable surge was recorded in 2020 when FCFE reached 16,916 million, which contrasts with the dip observed in operating cash flow for that year. This spike in FCFE could indicate changes in capital expenditures, financing activities, or working capital adjustments. Nevertheless, FCFE declined to 11,522 million in 2021, before ascending sharply to an all-time high of 20,097 million US dollars in 2022.

In summary, both net cash provided by operating activities and free cash flow to equity generally followed an upward trajectory, albeit with distinct patterns of variation. Operating cash flow showed steady growth interrupted by a downturn in 2020, followed by robust recovery. Free cash flow to equity fluctuated more notably, with a remarkable increase in 2020, a drop in 2021, and a subsequent strong increase in 2022. These trends suggest effective cash generation capability with potential shifts in investing and financing activities influencing equity cash flow.

Share Price Trend

The share price showed a consistent upward trend throughout the period from September 30, 2017, to September 30, 2022. It increased from $109.82 in 2017 to $210.14 in 2022, more than doubling over the five-year span. Notably, the share price experienced steady growth annually with minor fluctuations, particularly between 2020 and 2021 where it slightly declined from $207.57 to $203.33 before rising again in 2022.

Free Cash Flow to Equity (FCFE) per Share

The FCFE per share exhibited variable performance across the years. Starting at $4.84 in 2017, it dipped slightly in 2018 to $4.64, followed by a rise to $5.58 in 2019. There was a significant increase in 2020 to $7.93, succeeded by a notable decline to $5.46 in 2021, and then a strong rebound to $9.75 in 2022. This indicates that the company’s capacity to generate free cash flow per share has fluctuated, showing some volatility but overall growth by the end of the period.

Price to Free Cash Flow to Equity Ratio (P/FCFE)

The P/FCFE ratio experienced meaningful fluctuations throughout the timeframe. Starting at 22.7 in 2017, it increased sharply to a peak of 37.21 in 2021, suggesting that the market valuation relative to free cash flow per share expanded significantly at that point. However, this ratio dropped subsequently to 21.56 in 2022, indicating a shift toward more attractive valuation levels relative to the company’s free cash flow. This decline in the ratio coincides with the surge in FCFE per share in 2022 and a moderate increase in share price.

Overall Analysis

The data illustrates solid share price appreciation aligned with a generally increasing free cash flow to equity per share over the analyzed period, albeit with some volatility in FCFE figures. The P/FCFE ratio highlights periods where market valuations may have been stretched, particularly around 2021, before correcting in 2022. The decline in the P/FCFE ratio in the most recent year suggests a potential undervaluation or improved cash flow generation efficiency, possibly increasing investor attractiveness. This interplay between share price, cash flow generation, and valuation ratios provides insights into market sentiment and operational performance over time.