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MasterCard (MA) Gains But Lags Market: What You Should Know

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MasterCard (MA) closed the most recent trading day at $325.39, moving +1.01% from the previous trading session. This move lagged the S&P 500's daily gain of 1.46%. Meanwhile, the Dow gained 1%, and the Nasdaq, a tech-heavy index, lost 0.17%.

Prior to today's trading, shares of the processor of debit and credit card payments had lost 4.93% over the past month. This has was narrower than the Business Services sector's loss of 6.16% and the S&P 500's loss of 6.94% in that time.

MasterCard will be looking to display strength as it nears its next earnings release. In that report, analysts expect MasterCard to post earnings of $2.35 per share. This would mark year-over-year growth of 20.51%. Our most recent consensus estimate is calling for quarterly revenue of $5.26 billion, up 16.14% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.52 per share and revenue of $22.16 billion. These totals would mark changes of +25.24% and +17.34%, respectively, from last year.

Any recent changes to analyst estimates for MasterCard should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. The Zacks Consensus EPS estimate has moved 0.37% higher within the past month. MasterCard is currently a Zacks Rank #3 (Hold).

Digging into valuation, MasterCard currently has a Forward P/E ratio of 30.61. This valuation marks a premium compared to its industry's average Forward P/E of 13.8.

It is also worth noting that MA currently has a PEG ratio of 1.52. 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 was holding an average PEG ratio of 1 at yesterday's closing price.

The Financial Transaction Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 156, which puts it in the bottom 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow MA in the coming trading sessions, be sure to utilize Zacks.com.

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