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MasterCard (MA) Outpaces Stock Market Gains: What You Should Know

·3 min read

In the latest trading session, MasterCard (MA) closed at $335.85, marking a +1.75% move from the previous day. This change outpaced the S&P 500's 1.53% gain on the day. At the same time, the Dow added 1.19%, and the tech-heavy Nasdaq gained 0.14%.

Coming into today, shares of the processor of debit and credit card payments had lost 5.85% in the past month. In that same time, the Business Services sector lost 7.72%, while the S&P 500 lost 3.1%.

Wall Street will be looking for positivity from MasterCard as it approaches its next earnings report date. In that report, analysts expect MasterCard to post earnings of $2.60 per share. This would mark year-over-year growth of 9.7%. Meanwhile, our latest consensus estimate is calling for revenue of $5.68 billion, up 13.92% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.66 per share and revenue of $22.28 billion. These totals would mark changes of +26.9% and +17.96%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for MasterCard. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

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. MasterCard currently has a Zacks Rank of #3 (Hold).

Investors should also note MasterCard's current valuation metrics, including its Forward P/E ratio of 30.98. For comparison, its industry has an average Forward P/E of 16.29, which means MasterCard is trading at a premium to the group.

Meanwhile, MA's PEG ratio is currently 1.53. 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 1.06 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 187, which puts it in the bottom 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

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


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