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

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MasterCard (MA - Free Report) closed at $357.48 in the latest trading session, marking a +1.92% move from the prior day. This change outpaced the S&P 500's 1.02% gain on the day. At the same time, the Dow added 0.74%, and the tech-heavy Nasdaq lost 0.4%.

Prior to today's trading, shares of the processor of debit and credit card payments had gained 6.61% over the past month. This has outpaced the Business Services sector's loss of 2.81% and the S&P 500's loss of 0.91% in that time.

MasterCard will be looking to display strength as it nears its next earnings release. In that report, analysts expect MasterCard to post earnings of $2.19 per share. This would mark year-over-year growth of 33.54%. Meanwhile, our latest consensus estimate is calling for revenue of $5.12 billion, up 24.37% from the prior-year quarter.

MA's full-year Zacks Consensus Estimates are calling for earnings of $8.27 per share and revenue of $18.79 billion. These results would represent year-over-year changes of +28.62% and +22.8%, respectively.

It is also important to note the recent changes to analyst estimates for MasterCard. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.04% lower within the past month. MasterCard is currently a Zacks Rank #3 (Hold).

Looking at its valuation, MasterCard is holding a Forward P/E ratio of 42.42. Its industry sports an average Forward P/E of 25, so we one might conclude that MasterCard is trading at a premium comparatively.

It is also worth noting that MA currently has a PEG ratio of 2.03. 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 1.09 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 167, putting it in the bottom 35% 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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