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MasterCard (MA) Dips More Than Broader Markets: What You Should Know

MasterCard (MA) closed at $360.06 in the latest trading session, marking a -0.21% move from the prior day. This change lagged the S&P 500's daily loss of 0.12%. At the same time, the Dow added 0.1%, and the tech-heavy Nasdaq gained 0.05%.

Coming into today, shares of the processor of debit and credit card payments had gained 16.7% in the past month. In that same time, the Business Services sector gained 5.39%, while the S&P 500 gained 5.93%.

Investors will be hoping for strength from MasterCard as it approaches its next earnings release. The company is expected to report EPS of $2.57, up 9.36% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $5.77 billion, up 10.53% from the year-ago period.

MA's full-year Zacks Consensus Estimates are calling for earnings of $10.58 per share and revenue of $22.15 billion. These results would represent year-over-year changes of +25.95% and +17.32%, respectively.

Any recent changes to analyst estimates for MasterCard should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.03% lower within the past month. MasterCard is currently a Zacks Rank #3 (Hold).

Looking at its valuation, MasterCard is holding a Forward P/E ratio of 34.09. For comparison, its industry has an average Forward P/E of 16.22, which means MasterCard is trading at a premium to the group.

Investors should also note that MA has a PEG ratio of 1.85 right now. 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. The Financial Transaction Services industry currently had an average PEG ratio of 0.91 as of yesterday's close.

The Financial Transaction Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 166, which puts it in the bottom 35% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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