Mastercard (MA) AI Stock Analysis

• Market Cap: $510.88B
• Dividend Yield: 0.52%
• Average Volume (3M): 2.62M
• Price to Earnings (P/E): 38.3
• Beta (1Y): 0.83
• Revenue Growth: 14.55%
• EPS Growth: 13.25%
• Country: US
• Employees: 35,300
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 4.15
• Shares Outstanding: 897,274,200
• 10 Day Avg. Volume: 3,200,744
• 30 Day Avg. Volume: 2,622,730
• PEG Ratio: 2.18
• Price to Book (P/B): 75.11
• Price to Sales (P/S): 17.29
• P/FCF Ratio: 34.05
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 17.19
• Enterprise Value/Gross Profit: 22.46
• Enterprise Value/Ebitda: 28.58
• 1Y Price Target: $628.00
• Price Target Upside: 11.12% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 20

• Rating: 81 Outperform
• Price Target: $658.00 ▲(16.43% Upside)

Mastercard's strong financial performance and positive earnings call are the most significant factors driving the stock score. The company's robust profitability, cash flow generation, and strategic partnerships support its growth trajectory. While technical analysis indicates mixed signals, and valuation suggests a high P/E ratio, the company's strong fundamentals and positive outlook mitigate these concerns.

Positive Factors

Strategic Partnerships

These partnerships enhance Mastercard's market presence and service offerings, potentially driving long-term revenue growth and customer loyalty.

Cash Flow Generation

Strong cash flow generation supports Mastercard's ability to reinvest in growth initiatives, pay down debt, and return capital to shareholders.

Innovation in Digital Payments

Continuous innovation in digital payments strengthens Mastercard's competitive edge and aligns with the shift towards cashless transactions.

Negative Factors

High Debt-to-Equity Ratio

A high debt-to-equity ratio can limit financial flexibility and increase vulnerability to economic downturns, impacting long-term stability.

Regulatory Challenges

Regulatory challenges could lead to increased tax liabilities, affecting profitability and requiring strategic adjustments to comply with new regulations.

Geopolitical and Economic Uncertainty

Geopolitical and economic uncertainties can impact consumer spending and cross-border transactions, posing risks to Mastercard's growth trajectory.

Mastercard Business Overview & Revenue Model

Company Description

Mastercard Incorporated is a global technology company in the payments industry, headquartered in Purchase, New York. It operates in the financial services sector, primarily providing payment processing services, technology, and solutions to consumers, businesses, and financial institutions. Mastercard's core products include credit, debit, and prepaid cards, along with digital payment services that facilitate secure transactions across various channels, including online and in-person payments.

How the Company Makes Money

Mastercard generates revenue primarily through transaction processing fees, which are charged to financial institutions and merchants for services related to payment processing. The company earns a fee for each transaction processed on its network, which includes both card-based and digital payments. Additionally, Mastercard generates revenue from value-added services such as fraud detection, data analytics, and consulting services. Strategic partnerships with banks, retailers, and technology companies also contribute to its earnings by expanding its reach and enhancing its service offerings. Furthermore, Mastercard's focus on innovation in digital payments and the growth of e-commerce have bolstered its revenue streams, especially as consumers increasingly shift towards cashless transactions.

Mastercard Financial Statement Overview

Summary

Mastercard exhibits strong financial health with excellent profitability, robust cash flow generation, and a solid growth trajectory. High return on equity and strong cash flow margins offset leverage concerns.

Income Statement

Mastercard demonstrates a robust income statement with strong profitability metrics. The TTM (Trailing-Twelve-Months) shows a Gross Profit Margin of approximately 37.4% and a Net Profit Margin of 44.9%, indicating efficient cost management and high profitability. Revenue growth is impressive, with a year-over-year increase of 7.4% from 2024 to TTM, showcasing a positive growth trajectory. EBIT and EBITDA margins are also strong at 55.8% and 57.7% respectively, reflecting solid operational efficiency.

Balance Sheet

The balance sheet reflects a stable financial position with a Debt-to-Equity Ratio of 2.41, which is fairly high and represents potential leverage risk. However, the Return on Equity (ROE) is impressive at 172.5%, signifying strong returns to shareholders. The Equity Ratio stands at 15.3%, indicating that a significant portion of assets is financed by equity, which is relatively low and suggests a reliance on debt financing.

Cash Flow

Cash flow analysis shows exceptional performance with a strong Free Cash Flow Growth Rate of 14.6% from 2024 to TTM. The Operating Cash Flow to Net Income Ratio is healthy at 1.25, indicating efficient conversion of income into cash. The Free Cash Flow to Net Income Ratio is robust at 1.21, showcasing the company's ability to generate free cash flow relative to its net income, supporting its high liquidity and reinvestment capabilities.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	30.24B	28.17B	25.10B	22.24B	18.88B	15.30B
Gross Profit	23.15B	21.49B	19.08B	16.97B	14.39B	11.51B
EBITDA	18.19B	16.80B	15.01B	12.95B	11.46B	8.72B
Net Income	13.59B	12.87B	11.20B	9.93B	8.69B	6.41B
Balance Sheet
Total Assets	51.43B	48.08B	42.45B	38.72B	37.67B	33.58B
Cash, Cash Equivalents and Short-Term Investments	9.37B	8.77B	9.18B	7.41B	7.89B	10.60B
Total Debt	18.97B	18.23B	15.68B	14.02B	13.90B	12.67B
Total Liabilities	43.56B	41.57B	35.45B	32.35B	30.26B	27.07B
Stockholders Equity	7.87B	6.49B	6.93B	6.30B	7.31B	6.39B
Cash Flow
Free Cash Flow	16.39B	14.31B	11.61B	10.10B	8.65B	6.52B
Operating Cash Flow	16.95B	14.78B	11.98B	11.20B	9.46B	7.22B
Investing Cash Flow	-3.50B	-3.40B	-1.35B	-1.47B	-5.27B	-1.88B
Financing Cash Flow	-10.89B	-10.84B	-9.49B	-10.33B	-6.55B	-2.15B

Mastercard Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 565.13
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MA, the sentiment is Negative. The current price of 565.13 is below the 20-day moving average (MA) of 583.67, below the 50-day MA of 578.02, and above the 200-day MA of 554.21, indicating a neutral trend. The MACD of -3.03 indicates Positive momentum. The RSI at 37.86 is Neutral, neither overbought nor oversold. The STOCH value of 6.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MA.

Mastercard Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MA	81 Outperform	$510.88B	38.27	177.90%	0.52%	14.55%	13.25%
AXP	79 Outperform	237.77B	23.99	31.40%	0.89%	8.03%	6.26%
PYPL	79 Outperform	64.30B	14.41	23.16%	―	4.05%	13.85%
V	78 Outperform	649.98B	33.30	52.33%	0.70%	11.38%	7.43%
SYF	78 Outperform	27.73B	9.06	21.10%	1.48%	-3.16%	14.60%
COF	69 Neutral	143.28B	115.37	―	1.07%	10.51%	-81.56%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

Mastercard Corporate Events

Mastercard Approves Amendments at Annual Stockholders Meeting

On June 24, 2025, Mastercard held its annual stockholders meeting where several amendments to its Certificate of Incorporation were approved. These changes, effective June 25, 2025, include limiting officer liability, eliminating Industry Directors, and implementing other modifications. Additionally, the stockholders elected directors for a one-year term and approved executive compensation and the appointment of PricewaterhouseCoopers LLP as the independent auditor. However, proposals for a racial equity audit and an affirmative action risks report were not approved.