Stock analysis is a critical skill for any investor, and this guide will walk you through the essential steps of fundamental analysis using Seeking Alpha. In the first section, I use Visa stock as the example and we review their basic fundamentals. This includes key metrics such as earnings, revenue, P/E ratio, and recent price history. Next, I compare Visa stock with Mastercard and PayPal across several metrics using Seeking Alpha Premium's stock screener and comparison tool. This section will cover various techniques to compare the revenue and earnings growth for each company, while relating these numbers to their valuation multiple. Finally, I discuss cash flow and debt metrics to make a final assessment on Visa stock as an investment. This stock analysis guide will show you how to perform your own stock research to determine if a stock is at least worth adding to your watchlist. It is not the end of the process though, as it is recommended your read through earnings reports and momentum signals before making a final decision.

2. Stock Analysis Guide
A Special Report
by Geoff Beers
40Finance.com
YouTube
Important Disclaimer: The content of this report is provided for informational
purposes only and is not intended to be investing advice. Consider talking to a
financial professional before investing in stocks. This report contains affiliate links
that could earn me a commission for any referred sales.
There is No Easy Button.
There are plenty of smart people out there who, if they could, would give you a
checklist of metrics that would point you to the next Amazon or Apple stock. The
fact is that stock picking is not easy. The best we can do is make informed
decisions, and research is a big part of that process. The purpose of this guide is
to provide a framework you can follow for your own stock research.
Terminology
I will be using some common stock market terms and acronyms in my writing. If
you are brand new to investing, you may need to look up some of the
terminology. I recommend the free Investopedia Dictionary as a solid source of
information.
Seeking Alpha Special Offer
If you are interested in learning more about Seeking Alpha Premium, be sure to
check out this special offer. You will get 50% off a full year subscription and a
free trial period. You can also check out my website for an in-depth Seeking
Alpha review if you want to read about all of the features.

3. Step 1: Seeking Alpha Stock Page
I browse a handful of stock market websites, but my in-depth research always
begins at Seeking Alpha. SA’s fundamental data, particularly their forward-
looking metrics, are simply second-to-none. You can access parts of the website
for free, but my affiliate link above gives you a great deal on the most valuable
features.
For this report, we will use Visa Inc. (V) as our target stock.
Here are some things we want to know from Visa’s stock overview:
1. What is the stock price?
2. What is the projected FORWARD PE ratio?
3. How has the price fluctuated over the past month and year(s)?
4. Does the stock offer a dividend?
Let’s review the data points and what each one means…

4. 1. Visa has a price of $217 and a market cap of $444 billion. Price is only
relevant if you have a level of expectation, but the market cap tells us how
valuable (or popular) the company is. Market cap is calculated by
multiplying the share price by the number of outstanding shares. I
personally do not buy many stocks under a $2 billion market cap.
2. Visa has a current FORWARD PE ratio of 25.54. I use FORWARD PE
instead of TRAILING PE to gauge how “expensive” a stock is relative to
short-term EPS projections. Future earnings are much more important than
trailing earnings for predicting stock price movement. Generally speaking,
I’m looking for stocks with a forward PE under 30.
3. Looking at the one-year chart and 52-week range, we can see the price
has fluctuated quite a bit. This can be a red flag, but in this case, Visa is
more the victim of the volatile market we’ve had between 2021 and 2023.
We will try to confirm this through more research.
4. On the dividend front, we can see that Visa does offer a small dividend. I
personally do not prioritize dividends when I invest, but I consider it a
“bonus point” when comparing different ticker symbols.
All the data points above are only useful if we compare them to other
stocks. How does Visa stack up to other stocks in the SAME SECTOR AND
INDUSTRY?
This question leads us to step #2 in our stock analysis…

5. Step 2: Stock Comparison
Using the Seeking Alpha Stock Comparison Tab we can quickly stack Visa up
against similar companies like Mastercard and PayPal.
In March 2023, Visa’s FORWARD PE is lower than Mastercard, but higher than
PayPal. This means Visa’s price per projected earnings is cheaper than MA, at
least looking out over the next year.
This is a good sign from a fundamental analysis view, but we also need to
consider future GROWTH…

6. Looking at the FORWARD REVENUE GROWTH projections, Visa is ahead of
PayPal and very close to Mastercard. This is likely why Visa and Mastercard both
have a higher FORWARD PE than PayPal. Visa and Mastercard are projected to
produce more revenue growth, which often commands a higher PE multiple.
In terms of FORWARD EPS GROWTH, Visa trails Mastercard, which may
explain why the stock multiple (FORWARD PE) is a bit cheaper than MA.

7. Fundamental Red Flags
When it comes to fundamental analysis, there are two situations where I avoid a
stock entirely.
The first one is negative revenue growth. This means the company projects to
make less revenue in the future than they did in the past.
The red box in the table below shows where Intel has experienced a decline in
revenue year over year AND is projected to experience another decline over the
next year.
You’ll notice in the green boxes that AMD and Qualcomm both have grown
revenue YoY and are expected to do so again over the next year.
Note that with AMD, their revenue growth is projected to slow from 61% to 44%.
A declining growth rate often does lower the multiple (P/E) that investors are
willing to pay, but growing revenue still means you are getting more sales in the
future for a stock you bought yesterday.

8. Fundamental Red Flags
The second situation I avoid is negative EPS growth. Earnings is considered
the “bottom line” and is looked at as a profit indicator. Negative EPS growth
effectively increases the P/E ratio for a stock. Sometimes you hear this described
as a “value trap” because although the current P/E looks like a deal, a declining
EPS projection means you will own less earnings per share in the future. You
can see this playing out with Intel in the red box below…
The highlighted boxes below show the difference between a company with
declining EPS (Intel) versus a growing EPS line projected for AMD and QCOM.
Notice how the forward P/E for Intel is increasing compared to the competition…

9. Step 3: Debt and Balance Sheets
Switching back to our Visa analysis, we want to make sure they are on solid
financial ground. For this we will compare the balance sheets from the most
recent quarter…

10. You can spend HOURS analyzing a company’s income and balance sheet. For
our quick analysis though, we just want to make sure a company is not too far
over their means. We need to see enough cash flow and savings to pay the bills
and grow the company in the future.
In Visa’s case, they have plenty of operating cash flow ($18.79B) and cash on
hand ($16.12B) to manage their $20.49B debt load. Keep in mind that debt is
typically paid off across multiple years, so it is unlikely the total debt would
ever be due tomorrow, or even a year from now.
Mastercard is more leveraged from a debt-to-equity perspective, but I don’t have
too many concerns here. Ideally, the debt to equity should be under 100%. For
MA, their higher leverage could be due to an investment in growth initiatives.
That is something you would have to confirm before buying.
Overall, Visa looks fairly valued versus MasterCard.
MA is projected to grow earnings at a slightly higher rate, so it makes sense that
Visa’s forward PE is lower. We also know Visa has a solid balance sheet with
plenty of cash to cover their debt payments. Overall, I would be interested in Visa
stock given that is projected for double-digit growth in both EPS and revenue.

11. Step 4: Momentum and Sentiment
Our last step is to gauge the momentum and sentiment of Visa stock. For price
momentum, Seeking Alpha gives us instant analysis of the latest numbers.
Next, we want to look for any potential headlines that affect Visa’s
sentiment in either direction…
While there are several paid tools you can use, a lot of information can be found
for free with Google.
Google News – “Visa + stock”
Google news is a great option to scan the headlines of your favorite stocks. You
can usually tell by the headline if the sentiment is positive or negative. Pay close
attention to negative headlines as those articles are helpful to stress test your
bull thesis.
Seeking Alpha
One of my favorite features of Seeking Alpha Premium is their news and analysis
coverage of nearly every stock. There are two types of SA articles, news updates
and individual analysis. The former are fact-based news articles. The latter are
technically opinion pieces, but the SA community demands writers support all
theories with data and sources.

12. As of today, there is not much in the way of negative headlines for Visa. There is
one analysis/opinion piece in the top left that is probably worth reading though
since it mentions potential risks.
Obviously the news can change every day, so it is important to monitor the wire
for all of the stocks you own. Seeking Alpha makes this easy for subscribers with
the option to setup news alerts via email or app notifications.
So, is Visa stock a buy?
Overall, Visa stock passes my critical fundamental analysis points. I look for
stocks that are growing double-digits on the top (revenue) and bottom (earnings)
lines. Visa ticks both of those boxes and has plenty of capital for a rainy day.
Bottom line: Visa’s fundamental metrics are attractive enough for me to add it to
my watchlist. I would need to do a further deep dive, including reviewing their last

13. few investor decks before I took action and actually bought it. I also believe in
buying small lots over time, so I would likely purchase a few shares every week
for several weeks if I did pull the trigger.
Final Thoughts
This Seeking Alpha stock analysis template is NOT designed to predict the next
Apple or Amazon. The goal here is to qualify or eliminate a stock for future
consideration. Following the simple analysis steps here will help you focus your
time and energy.
I hope you enjoyed this free report. Keep an eye on your inbox as I will be
sending you more stock analysis ideas to experiment with. Hopefully you will
discover a couple valuable nuggets to take away from each one.
Good luck with your investments,
Geoff
www.40Finance.com