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Mastercard Inc Class A MA

Morningstar Rating
$454.85 +2.34 (0.52%)
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Company Report

Visa and Mastercard: Judge May Not Approve Settlement

In March, Visa and Mastercard announced that they had reached a settlement to a long-standing antitrust lawsuit. As part of the agreement, the networks would slightly lower credit interchange fees and cap these fees at the current level for five years. At the time, we were happy to see this lawsuit seemingly resolved. But according to The Wall Street Journal, the judge has now informed Visa and Mastercard that she deems these changes inadequate and is unlikely to approve the settlement. This would presumably force the networks to arrange a new settlement or go to trial. While this is an obvious setback and we would prefer to see this matter closed as quickly as possible, we believe Visa and Mastercard’s unique competitive positions and their wide moats create ongoing legal and regulatory event risk, and this lawsuit represents just one piece of that. We will maintain our $272 and $451 fair value estimates for Visa and Mastercard, respectively, and see shares for both companies as about fairly valued.

Price vs Fair Value

MA is trading at a 113% premium.
Price
$454.85
Fair Value
$876.00
Uncertainty
Medium
1-Star Price
$398.69
5-Star Price
$513.60
Economic Moat
Qtmr
Capital Allocation
Xbffttgsf

Bulls Say, Bears Say

Bulls

Mastercard historically has outperformed Visa in terms of growth. Its smaller size and some leveling in market share between the two could maintain this trend.

Bears

Mastercard is a distant number-two player in a scalable industry, which could hamper long-term margins.

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News

Trading Information

Previous Close Price
$452.51
Day Range
$450.26455.30
52-Week Range
$359.77490.00
Bid/Ask
$454.01 / $454.85
Market Cap
$422.84 Bil
Volume/Avg
5.1 Mil / 2.4 Mil

Key Statistics

Price/Earnings (Normalized)
35.62
Price/Sales
16.65
Dividend Yield (Trailing)
0.54%
Dividend Yield (Forward)
0.58%
Total Yield
2.47%

Company Profile

Mastercard is the second-largest payment processor in the world, having processed close to over $9 trillion in volume during 2023. Mastercard operates in over 200 countries and processes transactions in over 150 currencies.
Sector
Financial Services
Industry
Credit Services
Stock Style Box
Large Growth
Total Number of Employees
33,400

Competitors

Valuation

Metric
MA
V
AXP
Price/Earnings (Normalized)
35.6229.2518.98
Price/Book Value
58.4814.495.76
Price/Sales
16.6516.582.72
Price/Cash Flow
29.3617.2410.89
Price/Earnings
MA
V
AXP

Financial Strength

Metric
MA
V
AXP
Quick Ratio
0.701.00
Current Ratio
1.091.40
Interest Coverage
25.1936.23
Quick Ratio
MA
V
AXP

Profitability

Metric
MA
V
AXP
Return on Assets (Normalized)
29.66%21.51%3.77%
Return on Equity (Normalized)
191.94%49.69%34.77%
Return on Invested Capital (Normalized)
57.01%33.22%
Return on Assets
MA
V
AXP
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Credit Services Industry Comparables

1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
Visa Inc Class A
V
RxrkfgxqGyfn$563.1 Bil
American Express Co
AXP
WrmdcbvpXskyh$165.7 Bil
PayPal Holdings Inc
PYPL
MvgwnkkgzNztqt$63.4 Bil
Capital One Financial Corp
COF
YlhwczxbMtwjwk$52.2 Bil
Discover Financial Services
DFS
BttyntskXzfwp$31.8 Bil
Synchrony Financial
SYF
YmqfzzhjkCgk$17.9 Bil
Ally Financial Inc
ALLY
WmxljjyjwBnlzt$12.1 Bil
SoFi Technologies Inc Ordinary Shares
SOFI
ZcgfgjrycGsty$6.7 Bil
The Western Union Co
WU
HlggytsKytvykb$4.2 Bil

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