Now trading at a price of $348.77, Mastercard has moved 0.22% so far today. In contrast, the S&P 500 index moved -1.17%. Read below for a basic value analysis of Mastercard.
Mastercard shares moved 1.55% over the last 52 weeks, with a high of $390.0 and a low of $276.42. During this time, the stock outperformed the S&P 500 index by 12.82%. As of January 2022, the company's 50-day average price is $365.0. Mastercard Incorporated is an American multinational financial services corporation headquartered in the Mastercard International Global Headquarters in Purchase, New York. The large-cap Consumer Discretionary company is based in Purchase, NY. Mastercard has returned a 0.65% dividend yield over the last 12 months.
Good EPS Growth with Healthy Leverage Levels:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $16,883 | $15,301 | $18,884 | $22,237 |
| Revenue Growth | n/a | -9.37% | 23.42% | 17.76% |
| Gross Margins | 57.24% | 53.29% | 53.89% | 56.75% |
| Gross Margins Growth | n/a | -6.9% | 1.13% | 5.31% |
| Operating Margins | 57.24% | 52.81% | 53.39% | 55.15% |
| Operating Margins Growth | n/a | -7.74% | 1.1% | 3.3% |
| Earnings Per Share | $8.05 | $6.49 | $8.84 | $10.34 |
| EPS Growth | n/a | -19.38% | 36.21% | 16.97% |
| Diluted Shares (MM) | 1,008 | 999 | 982 | 959 |
| Free Cash Flow (MM) | $7,455 | $6,516 | $8,649 | $10,098 |
| FCF Growth | n/a | -12.6% | 32.73% | 16.75% |
| Capital Expenditures (MM) | $728 | $708 | $814 | $1,097 |
| Net Debt / EBITDA | n/a | 1.82 | 1.86 | 1.67 |
Mastercard Is Overvalued:
Compared to the Consumer Discretionary sector's average of 22.33, Mastercard has a trailing twelve month P/E ratio of 34.57 and, according to its EPS guidance of 14.5, an expected P/E ratio of 24.05. Mastercard's PEG ratio is 1.49 based on its 23.2% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by Mastercard's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 2.65, which suggests that the company's shares are actually overvalued.
Mastercard's P/B ratio is 54.04 compared to its sector average of 3.12. The company is likely overvalued in terms of its net asset value. The company's shares are currently trading 920.39% above their fair value as expressed by Benjamin Graham's formula:
√(22.5 * 5-year average EPS * book value per share) = √(22.5 * 7.88 * 6.59) = $34.18
37 analysts are following Mastercard and have set target prices ranging from $360.0 to $472.0 per share. On average, they have given the company a rating of buy. At the current price of $348.77, MA is trading -17.92% away from its average analyst target price of $424.94 per share, implying an analyst consensus of some upside potential for the stock.
The company has no information on the number of shares sold short since 1% of the company's shares are tied to short positions. Institutions own 79% of Mastercard's shares, while the insider ownership rate stands at 11%.
