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

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MasterCard (MA) closed at $342.35 in the latest trading session, marking a -0.87% move from the prior day. This change lagged the S&P 500’s daily gain of 0.3%.

Prior to today’s trading, shares of the processor of debit and credit card payments had lost 0.13% over the past month. This has was narrower than the Business Services sector’s loss of 6.77% and the S&P 500’s loss of 2.37% in that time.

MA will be looking to display strength as it nears its next earnings release, which is expected to be October 28, 2021. In that report, analysts expect MA to post earnings of $2.18 per share. This would mark year-over-year growth of 36.25%. Our most recent consensus estimate is calling for quarterly revenue of $4.95 billion, up 29.12% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.11 per share and revenue of $18.81 billion. These totals would mark changes of +26.13% and +22.9%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for MA. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.01% higher. MA is currently a Zacks Rank #2 (Buy).

Looking at its valuation, MA is holding a Forward P/E ratio of 42.6. For comparison, its industry has an average Forward P/E of 19.9, which means MA is trading at a premium to the group.

Meanwhile, MA’s PEG ratio is currently 1.97. 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 1.2 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 69, which puts it in the top 28% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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