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MasterCard (MA) Stock Sinks As Market Gains: What You Should Know

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MasterCard (MA - Free Report) closed the most recent trading day at $349.55, moving -1.13% from the previous trading session. This change lagged the S&P 500's 0.43% gain on the day. Elsewhere, the Dow gained 0.25%, while the tech-heavy Nasdaq lost 0.09%.

Prior to today's trading, shares of the processor of debit and credit card payments had gained 7.75% over the past month. This has outpaced the Business Services sector's gain of 5.92% and the S&P 500's gain of 3.69% in that time.

Investors will be hoping for strength from MasterCard as it approaches its next earnings release. The company is expected to report EPS of $2.19, up 25.86% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.93 billion, up 18.63% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $10.22 per share and revenue of $22.23 billion, which would represent changes of +21.67% and +17.73%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for MasterCard. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.23% lower. MasterCard is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, MasterCard is holding a Forward P/E ratio of 34.6. This valuation marks a premium compared to its industry's average Forward P/E of 19.93.

We can also see that MA currently has a PEG ratio of 1.73. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Financial Transaction Services was holding an average PEG ratio of 1.14 at yesterday's closing price.

The Financial Transaction Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 179, putting it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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