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MasterCard (MA) Laps the Stock Market: Here's Why

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The latest trading session saw MasterCard (MA - Free Report) ending at $534.45, denoting a +1.03% adjustment from its last day's close. This move outpaced the S&P 500's daily gain of 0.82%. Elsewhere, the Dow lost 0.22%, while the tech-heavy Nasdaq added 1.77%.

Heading into today, shares of the processor of debit and credit card payments had lost 0.03% over the past month, lagging the Business Services sector's gain of 2.43% and the S&P 500's gain of 0.8% in that time.

The investment community will be paying close attention to the earnings performance of MasterCard in its upcoming release. In that report, analysts expect MasterCard to post earnings of $3.69 per share. This would mark year-over-year growth of 16.04%. Meanwhile, the latest consensus estimate predicts the revenue to be $7.41 billion, indicating a 13.12% increase compared to the same quarter of the previous year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $14.47 per share and revenue of $28.08 billion. These totals would mark changes of +18.03% and +11.89%, respectively, from last year.

Any recent changes to analyst estimates for MasterCard should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. 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. Within the past 30 days, our consensus EPS projection has moved 0.11% higher. As of now, MasterCard holds a Zacks Rank of #3 (Hold).

With respect to valuation, MasterCard is currently being traded at a Forward P/E ratio of 36.55. This indicates a premium in contrast to its industry's Forward P/E of 16.33.

Investors should also note that MA has a PEG ratio of 2.36 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. By the end of yesterday's trading, the Financial Transaction Services industry had an average PEG ratio of 1.44.

The Financial Transaction Services industry is part of the Business Services sector. Currently, this industry holds a Zacks Industry Rank of 75, positioning it in the top 30% of all 250+ industries.

The Zacks Industry Rank is ordered 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.

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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