Mastercard (MA)
Financials · $571B market cap · SEC CIK 0001141391
ahead of 90% of the S&P 500 · #8 of 76 in Financials
Next reports on Jan 27, 2027, after the close, with analysts expecting $5.29 in earnings per share.
52-week range $464.52 to $681.99. 3% below its 52-week high and 42% above its low.
The case for MA
- Earns 253% on shareholder equity, a figure flattered by a small equity base.
- 47% of revenue drops through to net profit.
- Revenue growing 15.3% year over year.
- Has compounded revenue at 16.5% a year over five years.
- Moves less than the market (beta 0.75).
The case against
- Pricey for its growth: 33.7× earnings, where 10%+ a year of growth plus a 0.6% dividend would justify about 24×.
- Priced at 15.7× sales, which leaves no room for a stumble.
- Priced at 72× book value. Very little hard asset backing here.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Financials companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 34 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 82 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 89 |
| Momentumhow the price has behaved lately | 80 |
| Stabilityhow violently it moves, what it owes and what it pays you | 56 |
- Its debt and cash flow are not scored, as for every company in the Financials sector: for banks, insurers and brokers, borrowing is the business.
- Each factor except momentum is half fixed thresholds, half rank among the 76 Financials companies.
The financials
Revenue growth
Is the business growing? Yes
| Last 12 months | +15.3% |
|---|---|
| Over 5 years | +16.5% a year |
| FY2025 revenue | $32.8B (+16%) |
Free cash flow
Is it generating real cash? Not meaningful for a financial company
Profit margins
Is profitability improving? Yes, improving
| Gross margin | n/a |
|---|---|
| Operating margin | 59% |
| Net margin, FY24 → FY25 → now | 45.7% → 45.6% → 46.7% |
Debt vs. cash
Is the balance sheet healthy? Not judged for a financial company
| Cash | $10.6B |
|---|---|
| Long-term debt | $18.3B |
| Net debt | $7.7B |
Valuation
Is the stock price reasonable? A bit pricey
| P/E | 33.7× |
|---|---|
| Fair P/E for its growth | 24× |
| Forward P/E | 28.2× |
| EV / EBITDA | 26.0× |
At 33.7× earnings it trades above the 24× that 10%+ a year of growth plus a 0.6% dividend would justify. It is judged on earnings alone: its book value is not what it earns on, as it would be for a bank or insurer.
The financials, five years deep
Pulled from Mastercard's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $32.8B | $28.2B | $25.1B | $22.2B | $29.8B |
| Change on the year | +16% | +12% | +13% | −25% | — |
| Free cash flow | |||||
| Free cash flow | $17.2B | $14.3B | $11.6B | $10.8B | $9.1B |
| Of revenue | 52% | 51% | 46% | 48% | 30% |
| Profit margins | |||||
| Operating margin | 57.6% | 55.3% | 55.8% | 55.2% | 33.8% |
| Net margin | 45.6% | 45.7% | 44.6% | 44.7% | 29.1% |
| Debt vs. cash | |||||
| Cash | $10.6B | $8.4B | $8.6B | $7.0B | $7.4B |
| Long-term debt | $18.3B | $17.5B | $14.3B | $13.7B | $13.1B |
| Net cash (debt) | −$7.7B | −$9.0B | −$5.8B | −$6.7B | −$5.7B |
What Mastercard says it does
Item 1. Business Overview Mastercard is a technology company in the global payments industry. We connect consumers, financial institutions, merchants, governments, digital partners, businesses and other organizations worldwide by enabling electronic payments and making those payment transactions secure, simple, smart and accessible. We make payments easier and more efficient by providing a wide range of payment solutions and services using our family of well-known and trusted brands, including our primary brand Mastercard®, as well as our Maestro® and Cirrus® brands. We operate a payments network that provides choice and flexibility for consumers, merchants and our customers. Through our unique and proprietary global payments network, we switch (authorize, clear and settle) payment transactions. We have additional payments capabilities that include automated clearing house (“ACH”) transactions (both batch and real-time account-based…