In the latest trading session, MasterCard (MA) closed at $367.59, marking a -1.02% move from the previous day. This change lagged the S&P 500's 0.62% gain on the day. At the same time, the Dow added 0.5%, and the tech-heavy Nasdaq lost 5.66%.
Prior to today's trading, shares of the processor of debit and credit card payments had lost 2.91% over the past month. This has lagged the Business Services sector's gain of 2.82% and the S&P 500's gain of 3.44% in that time.
Investors will be hoping for strength from MasterCard as it approaches its next earnings release. The company is expected to report EPS of $2.98, up 16.41% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.18 billion, up 12.48% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $12.25 per share and revenue of $25.15 billion. These totals would mark changes of +15.02% and +13.11%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for MasterCard. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, 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. The Zacks Consensus EPS estimate has moved 0.05% lower within the past month. MasterCard is currently sporting a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that MasterCard has a Forward P/E ratio of 30.31 right now. This represents a premium compared to its industry's average Forward P/E of 14.32.
We can also see that MA currently has a PEG ratio of 1.73. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Financial Transaction Services industry currently had an average PEG ratio of 1.11 as of yesterday's close.
The Financial Transaction Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 161, putting it in the bottom 37% of all 250+ industries.
The Zacks Industry Rank includes is listed in order 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 follow all of these stock-moving metrics, and many more, on Zacks.com.
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