tiprankstipranks
Trending News
More News >
Mastercard (MA)
NYSE:MA

Mastercard (MA) AI Stock Analysis

Compare
19,254 Followers

Top Page

MA

Mastercard

(NYSE:MA)

Rating:70Outperform
Price Target:
$593.00
▲(7.76%Upside)
Mastercard's overall score reflects its strong financial performance and positive earnings outlook, offset by technical indicators suggesting short-term weakness and a high valuation. The company's strategic focus on digital payment solutions and crypto expansion is promising, but geopolitical risks and high operating expenses pose challenges.
Positive Factors
Earnings
Mastercard's 1Q25 adjusted net income surpassed analysts’ estimates, driven by strong cross-border volume.
Market Position
Mastercard enjoys high net margins above 58% due to its strong competitive position and network effects, serving more than 110 million merchants.
Revenue Growth
Q1 revenues beat expectations across the board.
Negative Factors
Operating Expenses
Operating expenses are expected to be higher in the second half.
Regulatory Risks
There are regulatory risks due to Mastercard's dominance in the payment network, which could potentially impact its earnings.
Travel and Transaction Growth
Cross-border volume growth has reset lower, with a moderation largely attributed to cross-border travel slowing.

Mastercard (MA) vs. SPDR S&P 500 ETF (SPY)

Mastercard Business Overview & Revenue Model

Company DescriptionMastercard Incorporated, a technology company, provides transaction processing and other payment-related products and services in the United States and internationally. It facilitates the processing of payment transactions, including authorization, clearing, and settlement, as well as delivers other payment-related products and services. The company offers integrated products and value-added services for account holders, merchants, financial institutions, businesses, governments, and other organizations, such as programs that enable issuers to provide consumers with credits to defer payments; prepaid programs and management services; commercial credit and debit payment products and solutions; and payment products and solutions that allow its customers to access funds in deposit and other accounts. It also provides value-added products and services comprising cyber and intelligence solutions for parties to transact, as well as proprietary insights, drawing on principled use of consumer, and merchant data services. In addition, the company offers analytics, test and learn, consulting, managed services, loyalty, processing, and payment gateway solutions for e-commerce merchants. Further, it provides open banking and digital identity platforms services. The company offers payment solutions and services under the MasterCard, Maestro, and Cirrus. Mastercard Incorporated was founded in 1966 and is headquartered in Purchase, New York.
How the Company Makes MoneyMastercard makes money primarily through fees associated with its payment processing services. The company charges financial institutions fees for the services it provides, including transaction processing, which encompasses authorization, clearing, and settlement of payments. Mastercard's revenue model includes assessment fees, which are a percentage of the gross dollar volume of activity on Mastercard-branded cards, and transaction processing fees, which are based on the number of transactions processed. Additionally, Mastercard earns revenue from cross-border fees when cardholders use their cards in a different country from where they were issued. The company also generates income from value-added services such as fraud management, data analytics, consulting, and loyalty solutions. Significant partnerships with financial institutions, merchants, and technology providers further enhance Mastercard's revenue streams by expanding its global reach and facilitating new product offerings.

Mastercard Key Performance Indicators (KPIs)

Any
Any
Gross Dollar Volume
Gross Dollar Volume
Measures the total dollar value of transactions processed, reflecting the scale of Mastercard’s operations and its ability to capture consumer spending.
Chart InsightsMastercard's Gross Dollar Volume shows a strong upward trajectory, with a notable surge in 2024, reflecting robust consumer spending and strategic initiatives. The earnings call highlights a 17% revenue increase and significant adoption of contactless and tokenized payments, supporting this growth. However, geopolitical tensions and the potential migration of Capital One's portfolio to Discover pose risks. Despite increased operating expenses, Mastercard's focus on digital transformation and crypto payments expansion positions it well for sustained growth, with expectations for high-end revenue growth in 2025.
Data provided by:Main Street Data

Mastercard Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: 0.41%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Positive
Mastercard reported strong financial results with significant growth in net revenue and cross-border volumes. The company is experiencing robust adoption of contactless and tokenized payment technologies and is expanding in the crypto payment space. However, challenges exist due to geopolitical tensions and increased operating expenses. The potential migration of Capital One's portfolio also poses a risk.
Q1-2025 Updates
Positive Updates
Strong Revenue and Income Growth
Net revenues increased by 17% and adjusted net income rose by 13% year-over-year on a non-GAAP currency-neutral basis.
Growth in Consumer Payments
73% of in-person switch transactions are contactless and 35% of all switch transactions are tokenized, reflecting significant adoption of new payment technologies.
Expansion in Crypto Payments
Mastercard is collaborating with cryptocurrency platforms to enable crypto spending at over 150 million acceptance locations, and has enabled stablecoin settlement on its network.
Commercial Payment Solutions
Launched new commercial point-of-sale solutions and entered into a partnership with Corpay to enhance cross-border payment solutions.
Strong Cross-Border Volume Growth
Cross-border volume increased by 15% globally, reflecting continued growth in both travel and non-travel related cross-border spending.
Record-Breaking Transaction Growth
Switch transactions grew by 9% year-over-year, with card growth at 6% and over 3.5 billion Mastercard and Maestro-branded cards issued globally.
Negative Updates
Geopolitical and Economic Concerns
Consumer and business sentiment weakened due to geopolitical tensions and tariffs, posing challenges in the operating environment.
Moderation in Cross-Border Travel
Some moderation observed in cross-border travel growth, particularly in select markets in the Middle East and Africa.
Operating Expense Increase
Operating expenses increased by 14%, driven by investments in strategic initiatives and a 4 ppt increase from acquisitions.
Impact of Capital One's Migration
Anticipated migration of Capital One’s debit portfolio to Discover network could impact Mastercard’s volumes.
Company Guidance
During the Mastercard Q1 2025 Earnings Conference Call, the company provided several key metrics and guidance for the fiscal year. Net revenue increased by 17%, and adjusted net income rose 13% on a non-GAAP currency-neutral basis. The company highlighted that 73% of in-person switch transactions are now contactless, and 35% are tokenized, demonstrating their focus on digital transformation. Cross-border volume grew by 15%, with a focus on diversifying across regions and corridors. Mastercard's strategic initiatives include expanding crypto payment capabilities, with 150 million acceptance locations, and advancing commercial payment solutions. Operating expenses increased 14%, with expectations for further investment in strategic areas like AI and cybersecurity. The guidance for the full year 2025 anticipates net revenue growth at the high end of a low double-digit to low-teens range, with acquisitions adding 1 to 1.5 percentage points to growth. Operating expenses are expected to grow at the low end of a low double-digit range, with a minimal impact from foreign exchange on both revenue and expenses.

Mastercard Financial Statement Overview

Summary
Mastercard shows strong financial health with a robust income statement and cash flow, despite high leverage. The company demonstrates impressive profitability and a solid cash conversion ratio. However, the high debt-to-equity ratio necessitates careful monitoring.
Income Statement
90
Very Positive
Mastercard has shown robust growth in its income statement metrics. The TTM (Trailing-Twelve-Months) gross profit margin stands at 82.27%, indicating strong profitability from its operations. The net profit margin is 45.22%, reflecting efficient cost management. Revenue growth over the years is commendable, with a notable increase from 2024 to 2025. The EBIT and EBITDA margins are impressive at 55.48% and 58.47%, respectively, underscoring operational efficiency.
Balance Sheet
75
Positive
The balance sheet reveals a moderately high debt-to-equity ratio of 2.81, indicating significant leverage. However, the return on equity is strong at 196.28%, showing effective use of shareholder capital. The equity ratio is 13.81%, suggesting a lower proportion of assets financed by equity, which could be a potential risk if leverage increases further.
Cash Flow
88
Very Positive
Cash flow analysis shows a positive trajectory with a free cash flow growth rate of 6.59% from 2024 to TTM. The operating cash flow to net income ratio is 1.18, and the free cash flow to net income ratio is 1.16, indicating strong cash conversion and a healthy cash generation capability.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue29.07B28.17B25.10B22.24B18.88B15.30B
Gross Profit22.22B21.49B19.08B16.97B14.39B11.51B
EBITDA17.36B16.80B15.01B12.95B11.46B8.72B
Net Income13.14B12.87B11.20B9.93B8.69B6.41B
Balance Sheet
Total Assets48.47B48.08B42.45B38.72B37.67B33.58B
Cash, Cash Equivalents and Short-Term Investments7.89B8.77B9.18B7.41B7.89B10.60B
Total Debt18.80B18.23B15.68B14.02B13.90B12.67B
Total Liabilities41.77B41.57B35.45B32.35B30.26B27.07B
Stockholders Equity6.67B6.49B6.93B6.30B7.31B6.39B
Cash Flow
Free Cash Flow15.25B14.31B11.61B10.10B8.65B6.52B
Operating Cash Flow15.50B14.78B11.98B11.20B9.46B7.22B
Investing Cash Flow-3.57B-3.40B-1.35B-1.47B-5.27B-1.88B
Financing Cash Flow-11.14B-10.84B-9.49B-10.33B-6.55B-2.15B

Mastercard Technical Analysis

Technical Analysis Sentiment
Negative
Last Price550.32
Price Trends
50DMA
561.79
Negative
100DMA
552.25
Negative
200DMA
533.59
Positive
Market Momentum
MACD
-6.02
Positive
RSI
43.72
Neutral
STOCH
40.71
Neutral
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 550.32 is below the 20-day moving average (MA) of 569.00, below the 50-day MA of 561.79, and above the 200-day MA of 533.59, indicating a neutral trend. The MACD of -6.02 indicates Positive momentum. The RSI at 43.72 is Neutral, neither overbought nor oversold. The STOCH value of 40.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MA.

Mastercard Risk Analysis

Mastercard disclosed 32 risk factors in its most recent earnings report. Mastercard reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Mastercard Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
VV
82
Outperform
$676.01B35.4650.03%0.68%10.19%12.45%
DFDFS
78
Outperform
$50.34B10.6928.29%1.40%9.42%128.55%
AXAXP
78
Outperform
$222.22B22.1634.02%1.03%8.45%17.89%
76
Outperform
$71.62B16.5222.20%4.50%12.82%
COCOF
76
Outperform
$135.08B17.727.90%1.14%6.98%-6.76%
MAMA
70
Outperform
$499.72B38.60188.92%0.55%12.94%13.22%
67
Neutral
$16.66B11.449.71%3.91%11.61%-10.70%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MA
Mastercard
550.32
115.27
26.50%
AXP
American Express
317.19
85.99
37.19%
COF
Capital One Financial
211.01
73.23
53.15%
DFS
Discover Financial Services
200.05
68.79
52.41%
V
Visa
348.61
87.27
33.39%
PYPL
PayPal Holdings
73.64
15.83
27.38%

Mastercard Corporate Events

Executive/Board ChangesShareholder Meetings
Mastercard Approves Amendments at Annual Stockholders Meeting
Neutral
Jun 26, 2025

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.

The most recent analyst rating on (MA) stock is a Hold with a $470.00 price target. To see the full list of analyst forecasts on Mastercard stock, see the MA Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 19, 2025