Mastercard (MA) AI Stock Analysis

• Market Cap: $513.86B
• Dividend Yield: 0.54%
• Average Volume (3M): 2.82M
• Price to Earnings (P/E): 36.6
• Beta (1Y): 0.76
• Revenue Growth: 15.67%
• EPS Growth: 18.22%
• Country: US
• Employees: 35,300
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 4.38
• Shares Outstanding: 891,258,200
• 10 Day Avg. Volume: 3,288,971
• 30 Day Avg. Volume: 2,816,564
• 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: 16.61
• Enterprise Value/Gross Profit: 21.43
• Enterprise Value/Ebitda: 27.09
• 1Y Price Target: $685.25
• Price Target Upside: 19.75% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 23
• EPS Forecast (FY): 16.49
• Revenue Forecast (FY): $32.77B

• Rating: 75 Outperform
• Price Target: $608.00 ▲(6.25% Upside)

Mastercard's overall stock score is driven by its strong financial performance and positive earnings call sentiment, highlighting robust revenue growth and strategic expansions. However, technical analysis indicates bearish trends, and the high P/E ratio suggests potential overvaluation. The new credit facility supports financial flexibility, contributing positively to the score.

Positive Factors

Revenue Growth

Mastercard's strong revenue growth indicates effective business expansion and increased adoption of its services, supporting long-term financial health.

Strategic Partnerships

Expanding partnerships with major digital wallets enhances Mastercard's market reach and positions it well in the growing digital payments sector.

Cash Generation

Strong cash generation supports Mastercard's operational and financial stability, enabling reinvestment in growth initiatives and shareholder returns.

Negative Factors

High Debt Levels

Elevated leverage could pose financial risks if not managed carefully, potentially impacting Mastercard's long-term financial flexibility.

Capital One Debit Migration

Loss of revenue from Capital One debit migration could impact Mastercard's future earnings, necessitating strategic adjustments to offset this loss.

Higher Tax Rates

Increased tax rates could reduce net income, affecting profitability and potentially limiting resources available for growth and investment.

Mastercard Business Overview & Revenue Model

Company Description

Mastercard Incorporated (MA) is a global technology company in the payments industry, providing a wide range of financial services and solutions. Headquartered in Purchase, New York, Mastercard operates in over 210 countries and territories, facilitating electronic payment transactions between consumers, businesses, and financial institutions. The company's core products include credit, debit, and prepaid card services, as well as payment processing solutions and digital payment technologies. Mastercard also offers analytics, consulting, and cybersecurity services to enhance transaction security and streamline payment processes.

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

Mastercard exhibits strong financial performance with consistent revenue growth, high profitability, and effective cash flow management. The company benefits from high returns on equity, though the elevated debt-to-equity ratio suggests a need for careful leverage management. Overall, Mastercard is well-positioned in the financial services industry, with a robust business model and sound financial health.

Income Statement

Mastercard has demonstrated strong revenue growth with a TTM increase of 4.08% and consistent profitability, as evidenced by a high net profit margin of 45.28% and a robust EBIT margin of 41.80%. The company maintains a solid gross profit margin of 56.17% in the TTM period, although slightly lower than previous years. Overall, the income statement reflects a stable and profitable business model with positive growth trends.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio of 2.40, indicating significant leverage, which could pose risks if not managed carefully. However, Mastercard's return on equity is impressive at 196.90%, showcasing efficient use of equity to generate profits. The equity ratio stands at 14.86%, suggesting a moderate reliance on equity financing. While the company is profitable, the high leverage warrants cautious monitoring.

Cash Flow

Mastercard's cash flow statement reveals a healthy free cash flow growth rate of 3.78% in the TTM period, indicating strong cash generation capabilities. The operating cash flow to net income ratio of 0.84 and free cash flow to net income ratio of 0.97 reflect efficient cash conversion. The company demonstrates solid cash flow management, supporting its operational and financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	31.47B	28.17B	25.10B	22.24B	18.88B	15.30B
Gross Profit	24.39B	21.49B	19.08B	16.97B	14.39B	11.51B
EBITDA	19.29B	16.80B	15.01B	12.95B	11.46B	8.72B
Net Income	14.25B	12.87B	11.20B	9.93B	8.69B	6.41B
Balance Sheet
Total Assets	53.29B	48.08B	42.45B	38.72B	37.67B	33.58B
Cash, Cash Equivalents and Short-Term Investments	10.65B	8.77B	9.18B	7.41B	7.89B	10.60B
Total Debt	18.98B	18.23B	15.68B	14.02B	13.90B	12.67B
Total Liabilities	45.37B	41.57B	35.45B	32.35B	30.26B	27.07B
Stockholders Equity	7.92B	6.49B	6.93B	6.30B	7.31B	6.39B
Cash Flow
Free Cash Flow	17.01B	14.31B	11.61B	10.10B	8.65B	6.52B
Operating Cash Flow	17.48B	14.78B	11.98B	11.20B	9.46B	7.22B
Investing Cash Flow	-3.62B	-3.40B	-1.35B	-1.47B	-5.27B	-1.88B
Financing Cash Flow	-14.03B	-10.84B	-9.49B	-10.33B	-6.55B	-2.15B

Mastercard Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 572.23
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MA, the sentiment is Positive. The current price of 572.23 is above the 20-day moving average (MA) of 552.14, above the 50-day MA of 554.17, and above the 200-day MA of 558.63, indicating a bullish trend. The MACD of 4.80 indicates Negative momentum. The RSI at 62.13 is Neutral, neither overbought nor oversold. The STOCH value of 84.81 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MA.

Mastercard Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AXP	80 Outperform	$259.36B	25.28	33.70%	0.84%	8.14%	9.55%
PYPL	76 Outperform	$55.96B	12.00	24.36%	―	4.50%	19.71%
MA	75 Outperform	$513.86B	36.60	185.74%	0.54%	15.67%	18.22%
SYF	72 Outperform	$30.50B	9.25	21.64%	1.36%	-6.38%	19.65%
COF	71 Outperform	$154.95B	103.37	1.53%	1.07%	19.39%	-77.61%
V	70 Outperform	$667.85B	34.59	51.54%	0.70%	11.34%	2.76%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

Mastercard Corporate Events

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.

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.