Visa and Mastercard Post Strong Quarterly Gains, Fueling Debate Over Long-Term Value

In the latest sign of resilience for the global digital payments sector, industry titans Visa and Mastercard have both closed out their recent fiscal periods with impressive financial results, underscoring their entrenched positions in a world increasingly shifting away from cash.

Visa (NYSE: V) reported a 15% year-over-year increase in revenue for its fiscal first quarter of 2026, ended December 31. Diluted earnings per share (EPS) grew by 17% over the same period.

Not to be outdone, Mastercard (NYSE: MA) posted even stronger growth for its fourth quarter of 2025, also ended December 31. The company saw an 18% rise in revenue and a notable 24% jump in diluted EPS.

The results highlight the durable competitive advantages both companies enjoy: vast, self-reinforcing network effects driven by ubiquitous consumer card usage and near-universal merchant acceptance. This model continues to generate exceptionally high-profit margins.

Analysts note that Mastercard, as the smaller of the two by transaction volume, theoretically possesses a larger runway for growth. The prospect of it gradually capturing market share from its rival suggests its revenue and earnings could expand at a faster pace over the long term.

However, this growth potential comes at a price. Both stocks trade at rich valuations, with Visa and Mastercard commanding price-to-earnings ratios of 32.8 and 34.8, respectively. While these multiples have moderated from recent highs, they offer little traditional "margin of safety," leaving investors to weigh future growth against present cost.

"The core investment thesis for both remains intact—they are toll booths on the global digital economy," said David Chen, a portfolio manager at Horizon Capital. "For long-term holders, the debate isn't about which will fail, but which will compound capital more efficiently. Mastercard's slightly higher growth rate is appealing, but you're paying upfront for it."

Other observers were more critical of the current valuations. Anya Sharma, an independent market analyst known for her blunt commentary, did not mince words: "These results are solid, but they're completely priced in. A P/E in the mid-30s for mature financial infrastructure companies? It's absurd. The market is treating them like hyper-growth tech startups, ignoring regulatory risks and the eventual saturation of card penetration. This is momentum investing, not value investing."

Some advisors suggest a pragmatic middle ground. Michael Roberts, a certified financial planner, offered this perspective: "For most of my clients, trying to pick a winner is unnecessary. The sector growth story is compelling. Owning both through an ETF or allocating to each individually effectively bets on the continued expansion of electronic payments overall, rather than on one firm outmaneuvering the other."

As the digital payments landscape evolves with new entrants and technologies like real-time payments and central bank digital currencies (CBDCs), Visa and Mastercard's ability to maintain their growth premiums will be tested. For now, their latest earnings demonstrate remarkable operational strength, even as the investment community remains divided on their stock prices.