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MasterCard (MA) Ascends But Remains Behind Market: Some Facts to Note

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In the latest market close, MasterCard (MA - Free Report) reached $413.15, with a +0.67% movement compared to the previous day. The stock trailed the S&P 500, which registered a daily gain of 0.8%. Meanwhile, the Dow experienced a rise of 0.18%, and the technology-dominated Nasdaq saw an increase of 1.37%.

Shares of the processor of debit and credit card payments witnessed a gain of 5.31% over the previous month, trailing the performance of the Business Services sector with its gain of 7.85% and outperforming the S&P 500's gain of 4.39%.

Investors will be eagerly watching for the performance of MasterCard in its upcoming earnings disclosure. On that day, MasterCard is projected to report earnings of $3.07 per share, which would represent year-over-year growth of 15.85%. Alongside, our most recent consensus estimate is anticipating revenue of $6.45 billion, indicating a 10.89% upward movement from the same quarter last year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $12.16 per share and a revenue of $25 billion, signifying shifts of +14.18% and +12.43%, respectively, from the last year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections 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.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical 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. Within the past 30 days, our consensus EPS projection has moved 0.16% higher. Currently, MasterCard is carrying a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that MasterCard has a Forward P/E ratio of 33.74 right now. Its industry sports an average Forward P/E of 13.72, so one might conclude that MasterCard is trading at a premium comparatively.

Meanwhile, MA's PEG ratio is currently 1.86. 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 1.15 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 150, 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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