MasterCard (MA) Outpaces Stock Market Gains: What You Should Know
MasterCard (MA) closed the most recent trading day at $366.02, moving +1.16% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.88%.
Prior to today's trading, shares of the processor of debit and credit card payments had lost 3.64% over the past month. This has lagged the Business Services sector's loss of 2.35% and the S&P 500's gain of 0.15% in that time.
Investors will be hoping for strength from MA as it approaches its next earnings release. In that report, analysts expect MA to post earnings of $1.71 per share. This would mark year-over-year growth of 25.74%. Our most recent consensus estimate is calling for quarterly revenue of $4.35 billion, up 30.32% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.75 per share and revenue of $18.33 billion. These totals would mark changes of +20.53% and +19.78%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for MA. 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. The Zacks Consensus EPS estimate has moved 0.63% lower within the past month. MA currently has a Zacks Rank of #3 (Hold).
In terms of valuation, MA is currently trading at a Forward P/E ratio of 46.69. For comparison, its industry has an average Forward P/E of 23.93, which means MA is trading at a premium to the group.
Investors should also note that MA has a PEG ratio of 2.11 right now. 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 was holding an average PEG ratio of 1.39 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 199, which puts it in the bottom 22% 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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