Shares of Mastercard (MA) are trending higher in pre-market trading following the company’s strong second quarter results. Quarterly net revenue rose 17% year-over-year to $8.13 billion, easily surpassing the consensus estimate of $7.93 billion. Similarly, adjusted earnings of $4.15 per share outpaced the consensus of $4.03 per share. In the prior year quarter, MA reported adjusted earnings of $3.59 per share.
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Mastercard CEO Michael Miebach attributed the solid quarterly performance to the “momentum of deal wins” and also highlighted the extension of Mastercard’s exclusive partnership with American Airlines (AAL).
Understanding Mastercard’s Q2 Performance
The company credited continued consumer spending and cross-border volumes for the solid revenue growth. Importantly, Mastercard’s Gross Dollar Volume (GDV) grew 9.4% year-over-year to $2.631 trillion, and Purchase Volume jumped 10% to $2.182 trillion. GDV refers to the value of all transactions processed through Mastercard’s network.
According to Mastercard’s Key Performance Indicators (KPIs) data provided by Main Street Data, the Gross Dollar Volume shows a strong upward trajectory, reflecting robust consumer spending and strategic initiatives.
During the quarter, MA repurchased $2.3 billion worth of the company’s shares and also paid dividends totaling $691 million. The company has $9.3 billion remaining under approved stock buyback programs.
Is MA a Good Stock to Buy?
On TipRanks, MA stock has a Strong Buy consensus rating based on 22 Buys and four Hold ratings. Also, the average Mastercard price target of $630.71 implies 12.8% upside potential from current levels. Year-to-date, MA stock has gained 6.7%.
It is worth noting that these ratings were issued before the Q2 print and may change once analysts revise their recommendations.
