10Y annualized return is
excellent
at 19.3% per year
MA has met or exceeded earnings expectations in
all
recent quarters (10/10)
Strong Gross Profit Margin
Strong Net Profit Margin
High Return on Equity
Strong Interest Coverage
🏆 Strong Revenue Growth
🌍 Expanding Market Presence
🔒 Investment in Security
📈 Positive Growth Outlook
💡 Innovations in Payments
High Valuation Ratios
High Operating Costs
High Debt Levels
Liquidity Concerns
⚠️ Currency Headwinds
MasterCard demonstrates a strong business model with significant growth prospects and innovation potential. While facing currency volatility, the company's diverse partnerships, strong revenue growth, and strategic investments in security position it favorably for the future.
Analysis Date: January 30, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Mastercard Incorporated is a technology company that helps people and businesses make payments easily and securely. When you use a Mastercard to buy something, the company processes that payment, making sure the money moves from your bank to the store. They also offer services to help businesses manage payments and understand their customers better. In addition, Mastercard provides tools for online shopping and helps protect users from fraud.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$469.35
Current Market Price: $483.30
IV/P Ratio: 0.97x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-3.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for MA
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (34.89)
P/B ratio ≤ 1.5 (69.26)
Current ratio ≥ 2.0 (1.03x)
Long-term debt < Net current assets (34.67x)
Margin of safety (-3.0%)
MA does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
180.13%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
76.31%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
45.71%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
The company has a net profit margin of 45.71%, reflecting strong profitability after all expenses are accounted for.
The return on equity (ROE) is approximately 1.80, indicating that the company is generating a solid return on shareholders' investments.
Although the operating profit margin is strong at 55.32%, the overall high valuation ratios might indicate that this profitability is already priced into the stock.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
2.78x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.03x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
With an interest coverage ratio of 24.12, the company can comfortably meet its interest obligations, indicating strong financial stability.
The debt-to-equity ratio of 2.81 suggests a high level of debt relative to equity, which could pose risks if the company's earnings fluctuate.
With a current ratio of 1.03 and a cash ratio of 0.44, the company may have limited liquidity to cover short-term liabilities.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
MasterCard reported a 16% increase in net revenues and a 19% rise in adjusted net income for Q4 2024, showcasing robust financial performance driven by diverse payment capabilities.
MasterCard successfully renewed and expanded partnerships across various sectors, including significant contracts with ICBA payments, Nubank, and HSBC, enhancing its market position globally.
The acquisition of Recorded Future enhances MasterCard's capabilities in fraud prevention and cybersecurity, positioning it well in a competitive landscape where security is paramount.
MasterCard expects net revenues to grow at the high end of low double digits to low teens for 2025, indicating confidence in sustained growth amid a supportive macroeconomic environment.
The MasterCard 2030 initiative aims to enhance checkout experiences through tokenization and biometric solutions, potentially revolutionizing online payment security.
MasterCard anticipates a headwind of approximately 2 percentage points from foreign exchange, highlighting potential volatility in international markets impacting revenue.
