MasterCard (MA) Advances But Underperforms Market: Key Facts

MasterCard (MA) ended the recent trading session at $499.72, demonstrating a +1.16% change from the preceding day's closing price. The stock's change was less than the S&P 500's daily gain of 2.91%. Elsewhere, the Dow saw an upswing of 2.49%, while the tech-heavy Nasdaq appreciated by 3.83%.

Shares of the processor of debit and credit card payments have depreciated by 5.18% over the course of the past month, outperforming the Business Services sector's loss of 7.55%, and the S&P 500's loss of 7.64%.

Investors will be eagerly watching for the performance of MasterCard in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $4.38, marking a 17.43% rise compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $8.29 billion, indicating a 14.41% growth compared to the corresponding quarter of the prior year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $19.49 per share and revenue of $36.96 billion, indicating changes of +14.58% and +12.71%, respectively, compared to the previous year.

It is also important to note the recent changes to analyst estimates for MasterCard. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, there's been a 0.28% rise in the Zacks Consensus EPS estimate. Right now, MasterCard possesses a Zacks Rank of #3 (Hold).

In terms of valuation, MasterCard is presently being traded at a Forward P/E ratio of 25.35. Its industry sports an average Forward P/E of 9.87, so one might conclude that MasterCard is trading at a premium comparatively.

We can additionally observe that MA currently boasts a PEG ratio of 1.59. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As of the close of trade yesterday, the Financial Transaction Services industry held an average PEG ratio of 0.8.

The Financial Transaction Services industry is part of the Business Services sector. Currently, this industry holds a Zacks Industry Rank of 171, positioning it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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Mastercard Incorporated (MA): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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