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MasterCard (MA) Exceeds Market Returns: Some Facts to Consider

The most recent trading session ended with MasterCard (MA) standing at $450.11, reflecting a +0.45% shift from the previouse trading day's closing. This change outpaced the S&P 500's 0.25% gain on the day. On the other hand, the Dow registered a gain of 0.15%, and the technology-centric Nasdaq increased by 0.03%.

Shares of the processor of debit and credit card payments witnessed a loss of 2.51% over the previous month, trailing the performance of the Business Services sector with its loss of 0.98% and the S&P 500's gain of 3.34%.

The investment community will be closely monitoring the performance of MasterCard in its forthcoming earnings report. On that day, MasterCard is projected to report earnings of $3.50 per share, which would represent year-over-year growth of 21.11%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.85 billion, up 9.28% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $14.22 per share and a revenue of $27.8 billion, representing changes of +15.99% and +10.75%, respectively, from the prior year.

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Investors should also take note of any recent adjustments to analyst estimates for MasterCard. These revisions typically reflect the latest short-term business trends, which can change frequently. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. 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 31.52. Its industry sports an average Forward P/E of 15.41, so one might conclude that MasterCard is trading at a premium comparatively.

It's also important to note that MA currently trades at a PEG ratio of 1.75. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As of the close of trade yesterday, the Financial Transaction Services industry held an average PEG ratio of 0.95.

The Financial Transaction Services industry is part of the Business Services sector. This industry, currently bearing a Zacks Industry Rank of 51, finds itself in the top 21% echelons 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.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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Mastercard Incorporated (MA) : Free Stock Analysis Report

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Zacks Investment Research