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

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MasterCard (MA - Free Report) closed at $375.56 in the latest trading session, marking a +0.7% move from the prior day. This change outpaced the S&P 500's 0.35% gain on the day.

Coming into today, shares of the processor of debit and credit card payments had gained 2.04% in the past month. In that same time, the Business Services sector lost 13.35%, while the S&P 500 gained 3.64%.

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 30.36% 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 +19.8%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for MA. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. MA is holding a Zacks Rank of #4 (Sell) right now.

Looking at its valuation, MA is holding a Forward P/E ratio of 48.13. For comparison, its industry has an average Forward P/E of 23.53, which means MA is trading at a premium to the group.

Investors should also note that MA has a PEG ratio of 2.18 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 1.27 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 122, which puts it in the top 49% 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.

To follow MA in the coming trading sessions, be sure to utilize Zacks.com.


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