Visa stock had been on a remarkable run in the last decade, which saw the stock value increase more than 1,100%. Despite this bull run, analysts believe there is more room for upside growth thanks to the smart bet on millennials’ finance trends.
Fundamental analysis: Visa continues with investments in startups
Currencycloud, the UK-based financial technology start-up, announced that it successfully completed a $80 million financing round led by Visa. The company is developing and selling software solutions to financial institutions to manage and process international transactions.
“We call the segment embedded finance. We’re probably the most important business that you’ve never heard of. But that’s conscientious on our part. We do not have a strategy where we compete with our customers,” said Currencycloud CEO Mike Laven.
In addition to Visa, SAP’s Sapphire, as well as Google, BNP Paribas, and SBI have also participated in the financing round. According to Laven, Visa is seen as a “strategic investor”.
The latest investment in Currencycloud is just the continuation of the investment spree for Visa. Two weeks ago, Visa agreed to acquire the start-up Plaid in a deal worth around $5.3 billion. Plaid’s main products allow start-ups to connect to users’ bank accounts.
The fintech received attention from global players as Goldman, Visa, Master Card, Citi, and American Express are all registered as “early investors”.
“This fits well, strategically. We’re excited about new businesses and the ability for this to accelerate our revenue growth over time,” said Visa CEO Al Kelly, while adding that the Plaid deal was a “long-term” play for the next decade as the payment giant continues to bet aggressively on future financial trends.
Macquarie analyst Dan Dolev, placed an “overweight” rating on Visa stock with a comment “For Millennials, Buy Visa; For Everything Else, Buy Mastercard”. Moreover, he set a $250 price target on Visa’s stock.
Technical analysis: Remarkable bull run
The Visa daily chart shows the magnitude of last decade’s run. The stock price went almost vertically higher, practically without any corrections or pullbacks.
There was a minor pullback at the end of 2018, when the stock price rotated around 20% lower, just for a dip to be aggressively bought by investors. Following the dip, seven out of eight following monthly candles were bullish.
Visa stock price trades around 10% higher this month, which prompted a break of the ascending wedge. Technically, the room is open for more gains as long as the payments giant has the ability to grow its business. A potential pullback to previous record high of $187 is likely to be used by investors to buy more Visa stock.
Visa stock had been staging a remarkable run in the previous decade. In the meantime, the leadership of the company is aggressive in investing in promising fintech startups. The price has surpassed the $200 mark and continues to march towards the target of $250, set by Macquarie’s analyst.