Now trading at a price of $373.46, Mastercard has moved 1.8% so far today.
Mastercard shares moved -3.2% over the last 52 weeks, with a high of $390.0 and a low of $276.87. During this time, the stock outperformed the S&P 500 index by 2.0%. As of January 2022, the company's 50-day average price is $360.0. Mastercard Incorporated, a technology company, provides transaction processing and other payment-related products and services in the United States and internationally. The large-cap Consumer Discretionary company has 29,900 full time employees and is based in Purchase, NY. Mastercard has returned a 0.6% dividend yield over the last 12 months.
The Company Has a Steady Stream of Strong Cash Flows:
| 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% |
| Operating Margins | 57.2% | 53.3% | 53.9% | 56.8% |
| Operating Margins Growth | n/a | -6.82% | 1.13% | 5.38% |
| Earnings Per Share | $7.94 | $6.37 | $8.76 | $10.23 |
| EPS Growth | n/a | -19.77% | 37.52% | 16.78% |
| Diluted Shares (MM) | 1,022 | 1,006 | 992 | 8 |
| 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 | nan | 0.29 | 0.57 | 0.54 |
Mastercard Is Reasonably Valued:
Compared to the Consumer Discretionary sector's average of 22.33, Mastercard has a trailing twelve month P/E ratio of 36.5 and, according to its EPS guidance of 14.52, an expected P/E ratio of 25.7. Mastercard's PEG ratio is 2.74 based on its 12.8% compound average growth rate of historical and projected earnings per share. This suggests that the company's shares are overvalued.
Mastercard's P/B ratio is 56.7 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 963.5% above their fair value as expressed by Benjamin Graham's formula:
√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 8.32 * 6.588) = $35.12
Mastercard's strong cash flow trend and reasonable levels of debt attenuate the company's lofty valuation in terms of earnings and assets.
Mastercard Benefits From Positive Market Indicators:
36 analysts are following Mastercard and have set target prices ranging from $390.0 to $472.0 per share. On average, they have given the company a rating of buy. At the current price of $373.46, MA is trading -12.82% away from its average analyst target price of $428.36 per share, implying an analyst consensus of some upside potential for the stock.
The company has a very low short interest since 0.6% of the company's shares are tied to short positions. Institutions own 79.0% of Mastercard's shares, while the insider ownership rate stands at 10.74%. The biggest shareholder is the Vanguard Group, Inc. with a 8% stake in the company worth approximately $29,222,900,610.
