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

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MasterCard (MA - Free Report) closed at $377.80 in the latest trading session, marking a +0.44% move from the prior day. This move outpaced the S&P 500's daily gain of 0.37%. Meanwhile, the Dow lost 0.01%, and the Nasdaq, a tech-heavy index, lost 1.26%.

Prior to today's trading, shares of the processor of debit and credit card payments had gained 2.07% over the past month. This has lagged the Business Services sector's gain of 3.81% and the S&P 500's gain of 4.31% in that time.

MasterCard will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.98, up 16.41% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.18 billion, up 12.48% from the prior-year quarter.

MA's full-year Zacks Consensus Estimates are calling for earnings of $12.25 per share and revenue of $25.15 billion. These results would represent year-over-year changes of +15.02% and +13.11%, respectively.

It is also important to note the recent changes to analyst estimates for MasterCard. Recent revisions tend to reflect the latest 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Within the past 30 days, our consensus EPS projection has moved 0.13% lower. MasterCard currently has a Zacks Rank of #3 (Hold).

Digging into valuation, MasterCard currently has a Forward P/E ratio of 30.69. Its industry sports an average Forward P/E of 13.84, so we one might conclude that MasterCard is trading at a premium comparatively.

We can also see that MA currently has a PEG ratio of 1.76. 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. Financial Transaction Services stocks are, on average, holding a PEG ratio of 1.17 based on yesterday's closing prices.

The Financial Transaction Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 162, which puts it in the bottom 36% 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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