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

Zacks Equity Research

MasterCard (MA) closed the most recent trading day at $272.77, moving +0.61% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.62%. Meanwhile, the Dow gained 0.61%, and the Nasdaq, a tech-heavy index, added 1.05%.

Heading into today, shares of the processor of debit and credit card payments had lost 2% over the past month, lagging the Business Services sector's gain of 0.13% and the S&P 500's gain of 3.85% in that time.

Investors will be hoping for strength from MA as it approaches its next earnings release. On that day, MA is projected to report earnings of $2.01 per share, which would represent year-over-year growth of 12.92%. Meanwhile, our latest consensus estimate is calling for revenue of $4.42 billion, up 13.5% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.61 per share and revenue of $16.81 billion, which would represent changes of +17.26% and +12.44%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for MA. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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, the Zacks Consensus EPS estimate has moved 0.02% higher. MA currently has a Zacks Rank of #3 (Hold).

Investors should also note MA's current valuation metrics, including its Forward P/E ratio of 35.63. This valuation marks a premium compared to its industry's average Forward P/E of 23.59.

Also, we should mention that MA has a PEG ratio of 2.25. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MA's industry had an average PEG ratio of 2.16 as of yesterday's close.

The Financial Transaction Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 77, putting it in the top 31% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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