Mastercard (MA) AI Stock Analysis

• Market Cap: $488.57B
• Dividend Yield: 0.56%
• Average Volume (3M): 2.74M
• Price to Earnings (P/E): 34.8
• Beta (1Y): 0.81
• Revenue Growth: 15.67%
• EPS Growth: 18.22%
• Country: US
• Employees: 35,300
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 4.38
• Shares Outstanding: 891,258,200
• 10 Day Avg. Volume: 2,803,389
• 30 Day Avg. Volume: 2,742,929
• PEG Ratio: 2.18
• Price to Book (P/B): 75.11
• Price to Sales (P/S): 17.29
• P/FCF Ratio: 34.05
• Enterprise Value/Market Cap: 1.07
• Enterprise Value/Revenue: 16.61
• Enterprise Value/Gross Profit: 21.43
• Enterprise Value/Ebitda: 27.09
• 1Y Price Target: $690.04
• Price Target Upside: 26.83% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 18

• Rating: 69 Neutral
• Price Target: $604.00 ▲(11.02% Upside)

Mastercard's strong financial performance and positive earnings call sentiment are key strengths, supporting a robust business model and growth outlook. However, technical analysis indicates bearish momentum, and the high P/E ratio suggests potential overvaluation. These factors contribute to a balanced overall score.

Positive Factors

Revenue Growth

Mastercard's strong revenue growth, particularly in value-added services, indicates robust demand and effective market penetration, supporting long-term business expansion.

Digital Wallet Expansion

Expanding digital wallet partnerships enhances Mastercard's presence in digital payments, aligning with global cashless trends and driving future growth.

Co-Brand Partnerships

Strategic co-brand partnerships strengthen Mastercard's competitive edge and customer base, fostering sustained revenue and market share growth.

Negative Factors

High Debt-to-Equity Ratio

Significant leverage could pose financial risks, limiting flexibility and increasing vulnerability to economic downturns, necessitating careful debt management.

Capital One Debit Migration Impact

Loss of revenue from Capital One debit migration may impact future earnings, highlighting dependency on key partnerships and potential revenue volatility.

Higher Effective Tax Rate

An increased tax rate can reduce net income, affecting profitability and cash flow, potentially impacting investment capacity and shareholder returns.

Mastercard Business Overview & Revenue Model

Company Description

Mastercard Incorporated, a technology company, provides transaction processing and other payment-related products and services in the United States and internationally. It facilitates the processing of payment transactions, including authorization, clearing, and settlement, as well as delivers other payment-related products and services. The company offers integrated products and value-added services for account holders, merchants, financial institutions, businesses, governments, and other organizations, such as programs that enable issuers to provide consumers with credits to defer payments; prepaid programs and management services; commercial credit and debit payment products and solutions; and payment products and solutions that allow its customers to access funds in deposit and other accounts. It also provides value-added products and services comprising cyber and intelligence solutions for parties to transact, as well as proprietary insights, drawing on principled use of consumer, and merchant data services. In addition, the company offers analytics, test and learn, consulting, managed services, loyalty, processing, and payment gateway solutions for e-commerce merchants. Further, it provides open banking and digital identity platforms services. The company offers payment solutions and services under the MasterCard, Maestro, and Cirrus. Mastercard Incorporated was founded in 1966 and is headquartered in Purchase, New York.

How the Company Makes Money

Mastercard generates revenue primarily through transaction processing fees, which are charged to financial institutions and merchants for services related to payment processing. The company earns a fee for each transaction processed on its network, which includes both card-based and digital payments. Additionally, Mastercard generates revenue from value-added services such as fraud detection, data analytics, and consulting services. Strategic partnerships with banks, retailers, and technology companies also contribute to its earnings by expanding its reach and enhancing its service offerings. Furthermore, Mastercard's focus on innovation in digital payments and the growth of e-commerce have bolstered its revenue streams, especially as consumers increasingly shift towards cashless transactions.

Mastercard Financial Statement Overview

Summary

Mastercard exhibits strong financial health with excellent profitability, robust cash flow generation, and a solid growth trajectory. The income statement shows high profitability with a net profit margin of 44.9%. The balance sheet indicates leverage risk with a Debt-to-Equity Ratio of 2.41, but this is mitigated by a high ROE of 172.5%. Cash flow performance is exceptional, with a strong Free Cash Flow Growth Rate of 14.6%.

Income Statement

Mastercard demonstrates a robust income statement with strong profitability metrics. The TTM (Trailing-Twelve-Months) shows a Gross Profit Margin of approximately 37.4% and a Net Profit Margin of 44.9%, indicating efficient cost management and high profitability. Revenue growth is impressive, with a year-over-year increase of 7.4% from 2024 to TTM, showcasing a positive growth trajectory. EBIT and EBITDA margins are also strong at 55.8% and 57.7% respectively, reflecting solid operational efficiency.

Balance Sheet

The balance sheet reflects a stable financial position with a Debt-to-Equity Ratio of 2.41, which is fairly high and represents potential leverage risk. However, the Return on Equity (ROE) is impressive at 172.5%, signifying strong returns to shareholders. The Equity Ratio stands at 15.3%, indicating that a significant portion of assets is financed by equity, which is relatively low and suggests a reliance on debt financing.

Cash Flow

Cash flow analysis shows exceptional performance with a strong Free Cash Flow Growth Rate of 14.6% from 2024 to TTM. The Operating Cash Flow to Net Income Ratio is healthy at 1.25, indicating efficient conversion of income into cash. The Free Cash Flow to Net Income Ratio is robust at 1.21, showcasing the company's ability to generate free cash flow relative to its net income, supporting its high liquidity and reinvestment capabilities.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	31.47B	28.17B	25.10B	22.24B	18.88B	15.30B
Gross Profit	24.39B	21.49B	19.08B	16.97B	14.39B	11.51B
EBITDA	19.29B	16.80B	15.01B	12.95B	11.46B	8.72B
Net Income	14.25B	12.87B	11.20B	9.93B	8.69B	6.41B
Balance Sheet
Total Assets	53.29B	48.08B	42.45B	38.72B	37.67B	33.58B
Cash, Cash Equivalents and Short-Term Investments	10.65B	8.77B	9.18B	7.41B	7.89B	10.60B
Total Debt	18.98B	18.23B	15.68B	14.02B	13.90B	12.67B
Total Liabilities	45.37B	41.57B	35.45B	32.35B	30.26B	27.07B
Stockholders Equity	7.92B	6.49B	6.93B	6.30B	7.31B	6.39B
Cash Flow
Free Cash Flow	17.01B	14.31B	11.61B	10.10B	8.65B	6.52B
Operating Cash Flow	17.48B	14.78B	11.98B	11.20B	9.46B	7.22B
Investing Cash Flow	-3.62B	-3.40B	-1.35B	-1.47B	-5.27B	-1.88B
Financing Cash Flow	-14.03B	-10.84B	-9.49B	-10.33B	-6.55B	-2.15B

Mastercard Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 544.07
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MA, the sentiment is Negative. The current price of 544.07 is below the 20-day moving average (MA) of 563.87, below the 50-day MA of 574.82, and below the 200-day MA of 559.38, indicating a bearish trend. The MACD of -5.42 indicates Positive momentum. The RSI at 32.91 is Neutral, neither overbought nor oversold. The STOCH value of 18.24 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MA.

Mastercard Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AXP	―	$249.10B	24.28	33.70%	0.87%	8.14%	9.55%
PYPL	―	$64.81B	13.90	24.36%	―	4.50%	19.71%
V	―	$649.07B	33.03	51.67%	0.68%	11.34%	3.00%
SYF	―	$26.79B	8.13	21.64%	1.50%	-6.38%	19.65%
MA	―	$488.57B	34.80	185.74%	0.56%	15.67%	18.22%
COF	―	$140.93B	114.16	-0.07%	1.08%	10.51%	-81.56%
Sector *	―	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

Mastercard Corporate Events

Mastercard’s Earnings Call Highlights Growth and Innovation

Mastercard Inc’s recent earnings call conveyed a positive sentiment, underscored by robust revenue growth and strategic advancements in co-brand partnerships and digital wallet expansion. Despite facing challenges such as the Capital One debit migration and higher tax rates, the overall tone was optimistic, focusing on growth and innovation.

Mastercard Reports Strong Q3 2025 Financial Results

Mastercard Inc., a leading global payments technology company, operates in the financial services sector, providing a wide range of digital payment solutions and services to consumers, businesses, and governments worldwide.

Mirova US LLC Boosts Stake in Mastercard Inc

TRB Advisors LP Increases Stake in Mastercard Inc

Platinum Investment Management Reduces Stake in Mastercard

Mastercard Reports Strong Q2 2025 Financial Results

Mastercard Inc. is a global technology company in the payments industry, offering a wide range of digital payment solutions and services to consumers, businesses, and governments across more than 220 countries and territories.

Mastercard’s Earnings Call Highlights Robust Growth

Mastercard’s recent earnings call reflected a strong quarter with notable revenue and income growth, largely driven by strategic partnerships and expanded service offerings. The company reported robust consumer spending and cross-border activity, although it acknowledged challenges posed by geopolitical and economic uncertainties in certain regions. Overall, the outlook remains positive with expectations of continued growth.