MasterCard (MA) Registers a Bigger Fall Than the Market: Important Facts to Note

In the latest close session, MasterCard (MA) was down 1.11% at $579.21. This change lagged the S&P 500's daily loss of 0.38%. On the other hand, the Dow registered a loss of 0.51%, and the technology-centric Nasdaq decreased by 0.29%.

Coming into today, shares of the processor of debit and credit card payments had gained 1.69% in the past month. In that same time, the Business Services sector gained 1.03%, while the S&P 500 gained 2.08%.

The upcoming earnings release of MasterCard will be of great interest to investors. On that day, MasterCard is projected to report earnings of $5.12 per share, which would represent year-over-year growth of 16.89%. Meanwhile, our latest consensus estimate is calling for revenue of $9.62 billion, up 11.86% from the prior-year quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $19.86 per share and revenue of $37.24 billion. These totals would mark changes of +16.75% and +13.57%, respectively, from last year.

Any recent changes to analyst estimates for MasterCard should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.38% higher. MasterCard is currently sporting a Zacks Rank of #3 (Hold).

From a valuation perspective, MasterCard is currently exchanging hands at a Forward P/E ratio of 29.5. This denotes a premium relative to the industry average Forward P/E of 13.49.

We can additionally observe that MA currently boasts a PEG ratio of 1.68. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Financial Transaction Services industry had an average PEG ratio of 0.88 as trading concluded yesterday.

The Financial Transaction Services industry is part of the Business Services sector. At present, this industry carries a Zacks Industry Rank of 164, placing it within the bottom 34% of over 250 industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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