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

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In the latest trading session, MasterCard (MA) closed at $346.92, marking a +1.66% move from the previous day. This move outpaced the S&P 500's daily gain of 0.99%. At the same time, the Dow added 0.51%, and the tech-heavy Nasdaq lost 0.31%.

Prior to today's trading, shares of the processor of debit and credit card payments had gained 7.95% over the past month. This has lagged the Business Services sector's gain of 9.63% and outpaced the S&P 500's gain of 7.91% in that time.

MasterCard will be looking to display strength as it nears its next earnings release, which is expected to be July 28, 2022. On that day, MasterCard is projected to report earnings of $2.36 per share, which would represent year-over-year growth of 21.03%. Meanwhile, our latest consensus estimate is calling for revenue of $5.26 billion, up 16.26% from the prior-year quarter.

MA's full-year Zacks Consensus Estimates are calling for earnings of $10.52 per share and revenue of $22.13 billion. These results would represent year-over-year changes of +25.24% and +17.21%, respectively.

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

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 0.1% lower within the past month. MasterCard is currently a Zacks Rank #3 (Hold).

Investors should also note MasterCard's current valuation metrics, including its Forward P/E ratio of 32.46. This represents a premium compared to its industry's average Forward P/E of 14.71.

Meanwhile, MA's PEG ratio is currently 1.64. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. 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 149, which puts it in the bottom 41% 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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