Mastercard (MA) AI Stock Analysis

• Market Cap: $524.16B
• Dividend Yield: 0.48%
• Average Volume (3M): 2.61M
• Price to Earnings (P/E): 41.4
• Beta (1Y): 0.72
• Revenue Growth: 12.07%
• EPS Growth: 17.27%
• Country: US
• Employees: 35,300
• Sector: Financial
• Sector Strength: 93
• Industry: Credit Finance
• EPS (TTM): 13.89
• Shares Outstanding: 904,889,500
• 10 Day Avg. Volume: 2,633,821
• 30 Day Avg. Volume: 2,607,686
• PEG Ratio: 2.40
• Price to Book (P/B): N/A
• Price to Sales (P/S): 18.61
• Price to Cash Flow (P/CF): 27.10
• P/FCF Ratio: 27.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $628.69
• Price Target Upside: 13.26% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 28

Mastercard demonstrates strong financial performance characterized by robust revenue growth and profitability, supported by effective strategic initiatives and a positive outlook. While its technical indicators are generally favorable, caution is advised due to near overbought conditions. The valuation suggests high expectations for future growth, while earnings call and corporate events affirm a positive trajectory despite some potential challenges.

Positive Factors

Earnings

Mastercard delivered a strong topline and bottomline performance due to increased consumer spending and heightened use of its services for crypto funding.

Technological Advancements

Mastercard is increasingly leveraging AI to improve security, customer experiences, and operational optimization.

Negative Factors

Regulatory Risks

Regulatory risks are present as Mastercard's dominance and network fees have been under regulatory scrutiny, which could potentially lead to significant losses in earnings.

Mastercard Business Overview & Revenue Model

Company Description

Mastercard, Inc. operates as a technology company. The firm engages in the payments industry that connects consumers, financial institutions, merchants, governments and business. It offers payment solutions for the development and implementation of credit, debit, prepaid, commercial and payment programs. The company was founded in 1966 and is headquartered in Purchase, NY.

How the Company Makes Money

Mastercard makes money primarily through transaction processing fees, which are collected as a percentage of each transaction facilitated through its network. The company generates revenue from three main sources: domestic assessments, cross-border volume fees, and transaction-related fees. Domestic assessments are fees charged to issuers and acquirers based on the volume of activity on Mastercard-branded cards within a specific country. Cross-border volume fees are charged for transactions that occur between different countries, often at a higher rate due to the additional complexity and risk involved. Transaction-related fees include charges for providing value-added services such as fraud prevention, data analytics, and consulting. Significant partnerships with financial institutions, merchants, and technology companies further enhance Mastercard's revenue potential by expanding its network and increasing transaction volumes. Additionally, Mastercard earns revenue through licensing fees from its extensive portfolio of technology and payment solutions.

Mastercard Financial Statement Overview

Summary

Mastercard's financial statements reveal a company in a strong growth phase, with impressive revenue and profit expansion, robust cash generation, and a solid balance sheet. Despite high leverage, the company demonstrates financial stability and profitability. The financial health of Mastercard is well-positioned to sustain its growth and navigate future challenges.

Income Statement

Mastercard has demonstrated robust revenue growth over recent years, with a significant increase from $15.3 billion in 2020 to $28.2 billion in 2024. The company boasts high gross and net profit margins, consistently above 50% and 45% respectively, indicating strong profitability and efficient cost management. The EBIT and EBITDA margins are also healthy, showcasing solid core earnings. Overall, the income statement reflects a strong growth trajectory and profitability.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio, with total debt of $18.2 billion against $6.5 billion in equity as of 2024. While the equity ratio is relatively low due to high liabilities, the company maintains a stable return on equity, driven by strong net income. The company's asset base has expanded significantly, enhancing its capacity to support growth. Despite high leverage, the company maintains financial stability.

Cash Flow

Cash flow analysis indicates strong operating cash flow, with a substantial increase from $7.2 billion in 2020 to $14.8 billion in 2024. Free cash flow has also grown significantly, supporting strategic investments and shareholder returns. The operating cash flow to net income ratio is favorable, suggesting efficient cash generation relative to earnings. Overall, the cash flow statement reflects a robust ability to generate cash, ensuring liquidity and flexibility.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
28.17B	25.10B	22.24B	18.88B	15.30B
	Gross Profit
21.49B	25.10B	16.97B	14.39B	11.51B
	EBIT
15.58B	14.01B	12.26B	10.08B	8.08B
	EBITDA
16.80B	15.15B	13.37B	10.99B	8.74B
	Net Income Common Stockholders
12.87B	11.20B	9.93B	8.69B	6.41B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
8.77B	9.18B	7.41B	7.89B	10.60B
	Total Assets
48.08B	42.45B	38.72B	37.67B	33.58B
	Total Debt
18.23B	15.68B	14.02B	13.90B	12.67B
	Net Debt
9.78B	7.09B	7.01B	6.48B	2.56B
	Total Liabilities
41.57B	35.45B	32.35B	30.26B	27.07B
	Stockholders Equity
6.49B	6.93B	6.30B	7.31B	6.39B
Cash Flow		Free Cash Flow
14.31B	11.61B	10.10B	8.65B	6.52B
	Operating Cash Flow
14.78B	11.98B	11.20B	9.46B	7.22B
	Investing Cash Flow
-3.40B	-1.35B	-1.47B	-5.27B	-1.88B
	Financing Cash Flow
-10.84B	-9.49B	-10.33B	-6.55B	-2.15B

Mastercard Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 555.07
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Neutral. The current price of 555.07 is below the 20-day moving average (MA) of 564.72, above the 50-day MA of 543.29, and above the 200-day MA of 495.31, indicating a neutral trend. The MACD of 5.85 indicates Positive momentum. The RSI at 47.84 is Neutral, neither overbought nor oversold. The STOCH value of 61.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MA.

Mastercard Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
V	84 Outperform	$688.11B	35.98	52.15%	0.61%	10.35%	16.40%
MA	80 Outperform	$524.16B	41.40	198.52%	0.48%	12.07%	17.27%
XYZ	74 Outperform	$36.82B	13.06	13.62%	―	10.06%	38060.98%
DFS	74 Outperform	$44.99B	10.10	25.30%	1.47%	15.25%	45.76%
PYPL	73 Outperform	$66.75B	16.88	20.31%	―	7.10%	4.45%
AXP	71 Outperform	$199.15B	20.22	33.47%	0.95%	10.12%	24.93%
Sector *	64 Neutral	$14.34B	10.61	9.28%	4.07%	18.04%	-9.54%

Mastercard Corporate Events

Mastercard Announces Leadership Transition with New Appointments

On February 26, 2025, Mastercard announced that Timothy Murphy will transition from Chief Administrative Officer to Vice Chair, effective May 1, 2025. Richard Verma will rejoin Mastercard as Chief Administrative Officer, succeeding Murphy. This leadership change aims to strengthen Mastercard’s strategic initiatives and regulatory relationships, with both Murphy and Verma reporting to CEO Michael Miebach. Verma, who has extensive experience in government and previously served at Mastercard, will oversee several key functions, enhancing the company’s operations and industry positioning.

Mastercard Increases CEO Michael Miebach’s Compensation

On February 6, 2025, Mastercard’s Board of Directors approved a compensation adjustment for CEO Michael Miebach, raising his base salary from $1.25 million to $1.4 million, effective March 1, 2025. Additionally, his target annual incentive bonus opportunity will increase from 200% to 250% of his new base salary, reflecting the company’s commitment to aligning executive compensation with performance goals.