We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Fees, Fines & Gains: Mastercard's 13% 3-Month Rise Laughs at Headlines
Read MoreHide Full Article
Key Takeaways
MA has climbed 12.7% in 3 months, outpacing Visa and the broader industry despite legal and regulatory risks.
Mastercard is advancing stablecoin integration and expanding value-added services to drive future growth.
MA trades at a 32.32X forward P/E, above peers, backed by strong cash flow, buybacks and earnings momentum.
Shares of Mastercard Incorporated (MA - Free Report) have climbed 12.7% over the past three months, outperforming the broader market, including key rival Visa Inc. (V - Free Report) , despite facing considerable headwinds. Over the same period, the broader industry rose 10.1%, while Visa gained 9.2%. However, American Express (AXP - Free Report) stood out with a 28.4% surge, benefiting from strong consumer sentiment and travel-related spending. Meanwhile, the S&P 500 rose 18.2%, driven largely by tech-sector momentum.
Price Performance – MA, V, AXP, Industry & S&P 500
Image Source: Zacks Investment Research
Mastercard Navigating Through Legal, Regulatory & Competitive Turbulence
Mastercard’s recent growth may look effortless on the surface, but it is happening against a backdrop of mounting regulatory and legal pressure. At the center of it all are the interchange and network fees, which are core to Mastercard’s revenue model. In the U.K., a tribunal recently ruled that Mastercardand Visa’s interchange fees breach European competition laws,paving the way for potential regulatory caps. Also, the U.K.’s Payment Systems Regulator will likely introduce fee limits, posing a risk to revenue growth in the region.
In the United States, the Department of Justice previously accused Mastercard and Visa of leveraging their dominance to overcharge merchants. Proposed legislation, the Credit Card Competition Act, could intensify pricing pressure and force routing alternatives that disrupt Mastercard’s pricing power. Although U.S. banks have pushed back, urging Congress to reject the bill, regulatory scrutiny remains high. Mastercard resolved a workplace pay bias case in early 2025, committing to internal audits. Late last year, it settled a major London lawsuit over card fees.
But regulation is not the only threat. Mastercard is also fending off growing competition from agile fintechs and alternative payment rails. Big Tech and retailers like Amazon and Walmart are exploring stablecoin-based settlement systems that could bypass Mastercard entirely. In this shifting landscape, the company’s continued rally signals strong investor confidence, but sustaining that momentum will require more than just weathering lawsuits. It will mean evolving fast enough to stay ahead of a rapidly changing payment future.
Mastercard Is Embracing Stablecoins
Rather than resisting change, Mastercard is preparing to integrate stablecoins into its ecosystem. While stablecoins offer advantages like faster settlements and lower costs, especially in cross-border transactions, they still lack critical consumer benefits such as credit access, fraud protection and rewards. These areas remain Mastercard’s stronghold.
Moreover, Mastercard is already taking proactive steps and developing crypto-friendly products. Its Multi-Token Network and pilot programs using USDC for settlements show it is exploring blockchain-powered payment infrastructure. Past innovations like mobile wallets did not replace card networks but expanded them, and Mastercard appears poised to ensure the same happens with stablecoins and crypto.
Both Mastercard and Visa are racing to adapt stablecoins, reportedly valued at roughly $253 billion. Their aim: integrate digital currency capabilities while preserving their core transaction networks.
Mastercard continues to command a valuation premium, signaling enduring investor trust. Based on forward earnings, the company trades at a P/E ratio of 32.32X, well above the industry average of 22.87X. Visa’s forward P/E stands at 28.51X, while American Express trails at 19.44X.
Image Source: Zacks Investment Research
Mastercard’s Growth Levers Remain Intact
Mastercard is strengthening its competitive position through increased merchant engagement, improved customer experience, and expanded digital capabilities. Tokenized transactions, for example, offer higher approval rates and lower fraud, boosting transaction volume and enhancing trust among financial institutions and retailers.
Its Value-Added Services have been a key growth engine, with revenues rising 17.7% in 2023, 16.8% in 2024, and another 16% in the first quarter of 2025. The company is also pursuing targeted acquisitions and partnerships to expand service offerings and fortify cybersecurity.
Meanwhile, strong cash generation supports buybacks, dividends and strategic investments. In the first quarter, Mastercard generated $2.4 billion in operating cash flow, up from $1.7 billion a year ago. It repurchased 4.7 million shares for $2.5 billion and distributed $694 million in dividends during the quarter.
Strong 2025 & 2026 Estimates for Mastercard
Analyst sentiment remains positive. The Zacks Consensus Estimate for Mastercard’s EPS indicates growth of 9.5% in 2025 and 16.6% in 2026. Revenues are expected to rise 13.1% and 11.9%, respectively. The stock has seen one upward earnings estimate revision over the past month, against no movement in the opposite direction. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The company has also outperformed earnings expectations in each of the last four quarters, delivering an average earnings surprise of 3.7%.
Despite facing regulatory pressure, legal challenges and rising competition from fintechs and alternative payment platforms, Mastercard has demonstrated remarkable resilience. Its ability to innovate, expand value-added services, and adapt to disruptive forces like stablecoins reinforces its long-term growth story. The company’s strong financial performance, premium valuation and steady earnings revisions all signal continued investor confidence.
With solid fundamentals, a forward-looking innovation strategy and favorable earnings momentum, Mastercard is well-positioned to navigate the current headwinds. Given these strengths, Mastercard carries a Zacks Rank #2 (Buy), making it an attractive pick for investors seeking exposure to a high-quality, future-ready payments leader. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Fees, Fines & Gains: Mastercard's 13% 3-Month Rise Laughs at Headlines
Key Takeaways
Shares of Mastercard Incorporated (MA - Free Report) have climbed 12.7% over the past three months, outperforming the broader market, including key rival Visa Inc. (V - Free Report) , despite facing considerable headwinds. Over the same period, the broader industry rose 10.1%, while Visa gained 9.2%. However, American Express (AXP - Free Report) stood out with a 28.4% surge, benefiting from strong consumer sentiment and travel-related spending. Meanwhile, the S&P 500 rose 18.2%, driven largely by tech-sector momentum.
Price Performance – MA, V, AXP, Industry & S&P 500
Mastercard Navigating Through Legal, Regulatory & Competitive Turbulence
Mastercard’s recent growth may look effortless on the surface, but it is happening against a backdrop of mounting regulatory and legal pressure. At the center of it all are the interchange and network fees, which are core to Mastercard’s revenue model. In the U.K., a tribunal recently ruled that Mastercardand Visa’s interchange fees breach European competition laws,paving the way for potential regulatory caps. Also, the U.K.’s Payment Systems Regulator will likely introduce fee limits, posing a risk to revenue growth in the region.
In the United States, the Department of Justice previously accused Mastercard and Visa of leveraging their dominance to overcharge merchants. Proposed legislation, the Credit Card Competition Act, could intensify pricing pressure and force routing alternatives that disrupt Mastercard’s pricing power. Although U.S. banks have pushed back, urging Congress to reject the bill, regulatory scrutiny remains high. Mastercard resolved a workplace pay bias case in early 2025, committing to internal audits. Late last year, it settled a major London lawsuit over card fees.
But regulation is not the only threat. Mastercard is also fending off growing competition from agile fintechs and alternative payment rails. Big Tech and retailers like Amazon and Walmart are exploring stablecoin-based settlement systems that could bypass Mastercard entirely. In this shifting landscape, the company’s continued rally signals strong investor confidence, but sustaining that momentum will require more than just weathering lawsuits. It will mean evolving fast enough to stay ahead of a rapidly changing payment future.
Mastercard Is Embracing Stablecoins
Rather than resisting change, Mastercard is preparing to integrate stablecoins into its ecosystem. While stablecoins offer advantages like faster settlements and lower costs, especially in cross-border transactions, they still lack critical consumer benefits such as credit access, fraud protection and rewards. These areas remain Mastercard’s stronghold.
Moreover, Mastercard is already taking proactive steps and developing crypto-friendly products. Its Multi-Token Network and pilot programs using USDC for settlements show it is exploring blockchain-powered payment infrastructure. Past innovations like mobile wallets did not replace card networks but expanded them, and Mastercard appears poised to ensure the same happens with stablecoins and crypto.
Both Mastercard and Visa are racing to adapt stablecoins, reportedly valued at roughly $253 billion. Their aim: integrate digital currency capabilities while preserving their core transaction networks.
Premium Valuation Reflects Strong Investor Confidence
Mastercard continues to command a valuation premium, signaling enduring investor trust. Based on forward earnings, the company trades at a P/E ratio of 32.32X, well above the industry average of 22.87X. Visa’s forward P/E stands at 28.51X, while American Express trails at 19.44X.
Mastercard’s Growth Levers Remain Intact
Mastercard is strengthening its competitive position through increased merchant engagement, improved customer experience, and expanded digital capabilities. Tokenized transactions, for example, offer higher approval rates and lower fraud, boosting transaction volume and enhancing trust among financial institutions and retailers.
Its Value-Added Services have been a key growth engine, with revenues rising 17.7% in 2023, 16.8% in 2024, and another 16% in the first quarter of 2025. The company is also pursuing targeted acquisitions and partnerships to expand service offerings and fortify cybersecurity.
Meanwhile, strong cash generation supports buybacks, dividends and strategic investments. In the first quarter, Mastercard generated $2.4 billion in operating cash flow, up from $1.7 billion a year ago. It repurchased 4.7 million shares for $2.5 billion and distributed $694 million in dividends during the quarter.
Strong 2025 & 2026 Estimates for Mastercard
Analyst sentiment remains positive. The Zacks Consensus Estimate for Mastercard’s EPS indicates growth of 9.5% in 2025 and 16.6% in 2026. Revenues are expected to rise 13.1% and 11.9%, respectively. The stock has seen one upward earnings estimate revision over the past month, against no movement in the opposite direction. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The company has also outperformed earnings expectations in each of the last four quarters, delivering an average earnings surprise of 3.7%.
Mastercard Incorporated Price and EPS Surprise
Mastercard Incorporated price-eps-surprise | Mastercard Incorporated Quote
Buy the Strength in Mastercard
Despite facing regulatory pressure, legal challenges and rising competition from fintechs and alternative payment platforms, Mastercard has demonstrated remarkable resilience. Its ability to innovate, expand value-added services, and adapt to disruptive forces like stablecoins reinforces its long-term growth story. The company’s strong financial performance, premium valuation and steady earnings revisions all signal continued investor confidence.
With solid fundamentals, a forward-looking innovation strategy and favorable earnings momentum, Mastercard is well-positioned to navigate the current headwinds. Given these strengths, Mastercard carries a Zacks Rank #2 (Buy), making it an attractive pick for investors seeking exposure to a high-quality, future-ready payments leader. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.