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

Zacks Equity Research
Eagle Bancorp (EGBN) delivered earnings and revenue surprises of -4.43% and -0.73%, respectively, for the quarter ended June 2019. Do the numbers hold clues to what lies ahead for the stock?

In the latest trading session, MasterCard (MA) closed at $225.64, marking a +1.7% move from the previous day. This change outpaced the S&P 500's 1.47% gain on the day. At the same time, the Dow added 0.79%, and the tech-heavy Nasdaq gained 2.02%.

Heading into today, shares of the processor of debit and credit card payments had gained 3.69% over the past month, outpacing the Business Services sector's gain of 3.34% and the S&P 500's gain of 1.5% 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 $1.68 per share, which would represent year-over-year growth of 12%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.89 billion, up 8.68% from the year-ago period.

MA's full-year Zacks Consensus Estimates are calling for earnings of $7.55 per share and revenue of $16.79 billion. These results would represent year-over-year changes of +16.33% and +12.3%, respectively.

Investors should also note any recent changes to analyst estimates for MA. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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 0.03% lower. MA is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that MA has a Forward P/E ratio of 29.38 right now. Its industry sports an average Forward P/E of 19.44, so we one might conclude that MA is trading at a premium comparatively.

We can also see that MA currently has a PEG ratio of 1.77. 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 1.58 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 152, 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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