Mastercard (MA) AI Stock Analysis

• Market Cap: $470.86B
• Dividend Yield: 0.54%
• Average Volume (3M): 4.00M
• Price to Earnings (P/E): 32.0
• Beta (1Y): 0.79
• Revenue Growth: 15.67%
• EPS Growth: 18.22%
• Country: US
• Employees: 35,300
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 4.76
• Shares Outstanding: 885,216,400
• 10 Day Avg. Volume: 3,011,056
• 30 Day Avg. Volume: 4,001,566
• PEG Ratio: 1.81
• Price to Book (P/B): 66.19
• Price to Sales (P/S): 15.62
• P/FCF Ratio: 30.28
• Enterprise Value/Market Cap: 1.01
• Enterprise Value/Revenue: 14.57
• Enterprise Value/Gross Profit: 17.46
• Enterprise Value/Ebitda: 23.65
• 1Y Price Target: $660.00
• Price Target Upside: 25.38% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 28
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: $620.00 ▲(17.78% Upside)
• Action: Reiterated Date: 02/06/26
• Date: Action: Reiterated 02/06/26

The score is driven primarily by strong financial performance (elite margins and strong cash generation) and a positive earnings outlook with diversified growth drivers. These strengths are tempered by mixed technical trends (negative MACD and trading below key moving averages) and a relatively expensive valuation (P/E ~33) with a low dividend yield.

Positive Factors

High Profitability

Sustained net margins near 42%–46% indicate durable structural advantage: low incremental processing costs and pricing power across a global network. High margins support reinvestment, product development and capital returns, helping the business absorb cyclical shocks while funding growth.

Strong Free Cash Flow Conversion

FCF converting at ~90%–97% of net income reflects high earnings quality and predictable cash generation. This durable cash flow funds buybacks, dividends, M&A and capex without reliance on external financing, increasing strategic optionality despite a leveraged balance sheet.

Diversified Growth: VAS & Move

High‑growth value‑added services and 35%+ Move transaction growth diversify revenue away from pure interchange and processing. Expanded digital payments, tokenization and Move endpoints increase addressable market and reduce reliance on volatile card volumes, supporting durable medium‑term growth.

Negative Factors

Higher Leverage

A debt-to-equity ratio around 2x–3x makes the capital structure more leveraged than peers, reducing financial flexibility. In tightening rate or stressed environments, higher leverage raises refinancing and interest-rate sensitivity, constraining free cash deployment and strategic moves.

Interchange Settlement Risk

A court‑pending settlement trimming interchange by 10 bps with a five‑year cap is a structural hit to network economics. Reduced interchange narrows a core revenue stream, pressuring margins and forcing longer‑term shifts toward higher‑mix services or pricing actions to offset the revenue loss.

Concentration / Debit Migration Risk

Reliance on large issuer relationships means portfolio migrations (e.g., Capital One debit roll‑off) can materially affect GDV and revenue. Such concentration creates durable volatility risk to volumes and complicates forecasting and ROI on sales efforts when major partners change processing arrangements.

Mastercard Business Overview & Revenue Model

Company Description

Mastercard 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 Money

Mastercard generates revenue primarily through transaction processing fees, which are charged to financial institutions and merchants each time a cardholder uses a Mastercard-branded card for a purchase. These fees are typically based on a percentage of the transaction value. Additionally, the company earns significant income from annual fees charged to issuers for card programs, as well as from value-added services such as fraud detection and prevention, data analytics, and customer insights. Strategic partnerships with banks, fintech companies, and retailers further contribute to Mastercard’s earnings by expanding its payment network and enhancing service offerings, thereby driving transaction volume and increasing revenue.

Mastercard Financial Statement Overview

Summary

High-quality fundamentals: elite profitability with very high net margins (~42%–46%) and strong revenue expansion post-2020, supported by strong free-cash-flow conversion (~90%–97% of net income). Offsets include a more leveraged capital structure (debt-to-equity ~2x–3x) and signs of moderating growth versus the rebound period.

Income Statement

Mastercard shows elite profitability with consistently very high operating and net margins (net margin ~42%–46% from 2020–2025). Revenue has grown strongly from 2021–2024, and 2025 annual results also show continued expansion versus 2024. The main weakness is growth volatility: 2020 saw a revenue decline, and the latest annual growth rate appears lower than the post-2020 rebound years, suggesting a more normalized growth trajectory.

Balance Sheet

The balance sheet is solid but more leveraged than ideal, with debt-to-equity generally around ~2x–3x across the period (2025 ~2.46x). Equity is relatively modest versus total debt, which reduces flexibility if conditions tighten. Offsetting this, profitability on shareholder capital is exceptionally strong (ROE consistently above 1.0), indicating the company is generating very high earnings relative to its equity base.

Cash Flow

Cash generation is a clear strength: free cash flow closely tracks net income (roughly ~90%–97% across years), signaling strong earnings quality and efficient conversion. Operating cash flow and free cash flow have grown materially since 2020, with positive growth in most years (a dip in 2020 is the notable exception). A watch item is that operating cash flow covers less than 1x of reported earnings (roughly ~0.61–0.79), implying some working-capital timing or non-cash dynamics that periodically reduce operating cash flow versus net income.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	32.79B	28.17B	25.10B	22.24B	18.88B
Gross Profit	27.36B	21.49B	19.08B	16.97B	14.39B
EBITDA	20.19B	16.80B	15.01B	12.95B	11.46B
Net Income	14.97B	12.87B	11.20B	9.93B	8.69B
Balance Sheet
Total Assets	54.16B	48.08B	42.45B	38.72B	37.67B
Cash, Cash Equivalents and Short-Term Investments	11.46B	8.77B	9.18B	7.41B	7.89B
Total Debt	19.00B	18.23B	15.68B	14.02B	13.90B
Total Liabilities	46.41B	41.57B	35.45B	32.35B	30.26B
Stockholders Equity	7.74B	6.49B	6.93B	6.30B	7.31B
Cash Flow
Free Cash Flow	16.91B	14.31B	11.61B	10.10B	8.65B
Operating Cash Flow	17.40B	14.78B	11.98B	11.20B	9.46B
Investing Cash Flow	-1.36B	-3.40B	-1.35B	-1.47B	-5.27B
Financing Cash Flow	-14.18B	-10.84B	-9.49B	-10.33B	-6.55B

Mastercard Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 526.41
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 526.41 is below the 20-day moving average (MA) of 534.61, below the 50-day MA of 550.85, and below the 200-day MA of 562.20, indicating a bearish trend. The MACD of -6.89 indicates Positive momentum. The RSI at 43.14 is Neutral, neither overbought nor oversold. The STOCH value of 25.30 is Neutral, 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
V	77 Outperform	$610.49B	30.35	53.44%	0.69%	11.34%	2.76%
MA	74 Outperform	$470.86B	31.96	210.49%	0.54%	15.67%	18.22%
AXP	72 Outperform	$237.73B	22.52	33.76%	0.84%	8.14%	9.55%
SYF	70 Outperform	$25.32B	7.85	21.30%	1.34%	-6.38%	19.65%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
PYPL	63 Neutral	$38.16B	7.67	25.73%	―	4.50%	19.71%
COF	53 Neutral	$133.43B	89.01	1.53%	1.05%	19.39%	-77.61%

Mastercard Corporate Events

Mastercard boosts executive compensation for key senior leaders

On February 2, 2026, Mastercard’s board-level Human Resources and Compensation Committee approved increases to base salary and target annual incentive bonus opportunities for two of the company’s Named Executive Officers, effective March 1, 2026. Chief Financial Officer Sachin Mehra’s base salary will rise from $825,000 to $875,000, with his target annual incentive bonus increasing from 150% to 175% of base salary, while Chief Services Officer Craig Vosburg’s base salary will increase from $800,000 to $825,000 and his target annual incentive bonus will move from 135% to 150% of base salary. The adjustments underscore Mastercard’s focus on retaining and incentivizing senior leadership through enhanced compensation tied to performance, which may signal confidence in the executives’ roles in driving the company’s strategic and financial objectives.

The most recent analyst rating on (MA) stock is a Buy with a $650.00 price target. To see the full list of analyst forecasts on Mastercard stock, see the MA Stock Forecast page.

Mastercard Secures New $8 Billion Credit Facility

On November 7, 2025, Mastercard Incorporated entered into a new five-year $8 billion revolving credit facility with a consortium of banks, including Citibank and JPMorgan Chase, replacing its previous facility. This credit arrangement, available in both U.S. dollars and Euros, will support Mastercard’s general corporate purposes and includes various financial terms and covenants, reflecting the company’s strategic financial management and its relationships with major financial institutions.

The most recent analyst rating on (MA) stock is a Buy with a $650.00 price target. To see the full list of analyst forecasts on Mastercard stock, see the MA Stock Forecast page.

Mastercard Announces Updated Class Settlement Agreement

On November 10, 2025, Mastercard announced an updated Class Settlement Agreement with merchants to resolve claims related to business practices, including network rules, in collaboration with Visa. The agreement provides merchants with more flexibility in accepting credit cards, simplifies surcharging and discounting rules, and includes a 10 basis point reduction in interchange rates, with a five-year cap on these rates. This settlement, pending court approval, aims to enhance competition and resolve pending U.S. merchant litigations, with changes expected to take effect by late 2026 or early 2027.

The most recent analyst rating on (MA) stock is a Buy with a $650.00 price target. To see the full list of analyst forecasts on Mastercard stock, see the MA Stock Forecast page.