Mastercard (NYSE:MA) has seen a strong 11.8% increase in its stock price over the past three months, outperforming the industry’s 8.2% growth. The company, headquartered in Purchase, NY, is a global leader in payment solutions. This growth can be attributed to resilient consumer spending and robust cross-border volumes. With a market cap of $443.9 billion, Mastercard has also outperformed the Business Services sector’s 7.9% growth and the S&P 500 Index’s 7% increase over the same period.
Key factors contributing to Mastercard’s performance include an expanding payment network, a focus on growth areas, and value-added services. The company’s active inorganic growth strategy, strategic alliances, technology upgrades, and product diversification have also played a role. These factors have contributed to its notable price appreciation.
Looking ahead, analysts project positive growth for Mastercard. The Consensus Estimate for the company’s 2024 full-year earnings is $14.37 per share, reflecting a 17.2% year-over-year increase. Revenue estimates for 2024 stand at approximately $28.1 billion, suggesting a 12.1% rise from the previous year. Cross-Border assessments and Transaction Processing assessments are expected to grow around 20% and 8% year over year, respectively, in 2024, driven by the growing cross-border business post-pandemic.
Mastercard’s strategic acquisitions, such as CipherTrace, Aiia, Vyze, Nets, RiskRecon, Dynamic Yield, and Finicity, have enhanced its operational capabilities. Partnerships, such as the one with SoftBank Corp. for the Test & Learn platform in Japan, are transforming decision-making processes. Collaborations with companies like Nexi and ALEXBANK are expanding its reach and services globally.
Despite its growth prospects, Mastercard faces challenges such as increasing operating costs and a high valuation. Adjusted operating expenses are expected to rise by over 11% year over year, which could impact its bottom line. Additionally, the stock is trading at a forward 12-month earnings multiple of 32.05X, significantly higher than the industry average of 24X. However, a systematic and strategic plan of action is expected to drive the company’s long-term growth.
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Author Stephanie Bédard-Châteauneuf 
