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Should Mastercard's $2.65B Recorded Future Buyout Get You Excited?
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Mastercard Incorporated (MA - Free Report) recently agreed to acquire Recorded Future, a leading global threat intelligence company, for $2.65 billion. This acquisition is aimed at enhancing Mastercard's cybersecurity capabilities to protect the payments system and provide a more comprehensive cyber defense for its clients.
By integrating Recorded Future’s AI-powered threat intelligence and analytics, Mastercard plans to strengthen its ability to prevent cyber threats, fraud and data breaches, both in payments and across other digital environments. MA is acquiring the company from private equity firm Insight Partners, and the deal is expected to close by the first quarter of next year. Insight Partners grabbed a controlling stake in the acquiree in 2019 through an all-cash transaction that valued it at over $780 million.
Why MA Chose Recorded Future?
The acquisition not only strengthens Mastercard's cybersecurity foothold but also aligns with its strategy to build trust and resilience in digital transactions, making it a valuable addition to its existing services. Recorded Future serves more than 1,900 clients across 75 countries. Its client base includes government organizations in 45 countries and more than 50% of businesses in the Fortune 100. This extensive reach demonstrates its significant influence and presence in the global cybersecurity market.
For Mastercard, this strengthened security can attract more clients and deepen relationships with existing customers, potentially increasing revenues. Additionally, the acquisition can open new revenue streams in cybersecurity services and provide opportunities for product innovation, which can further drive growth and profitability for Mastercard.
Exciting Numbers Ahead for MA?
The demand for Mastercard’s service offerings, like cybersecurity and data analytics, surged during COVID-19, providing revenue diversification benefits. Revenues from Value-Added Services grew 17.7% in 2023 and 16.7% in the first half of 2024. The added capabilities from the Recorded Future acquisition will further boost these numbers. MA expects cybercrime to cost $9.2 trillion globally this year alone.
MA's Price Performance
Shares of Mastercard have gained 18.3% in the past year compared with the industry’s 15.8% growth.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Mastercard currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Fidelity National’s current-year earnings indicates a 50.7% year-over-year jump. FIS beat earnings estimates in two of the trailing four quarters and missed twice. The consensus estimate for current-year revenues is pegged at $10.2 billion.
The Zacks Consensus Estimate for Paysign’s current-year bottom line indicates 75% year-over-year growth. The consensus estimate for PAYS’ current-year top line is pegged at $58 million, suggesting 22.6% year-over-year growth.
The Zacks Consensus Estimate for Remitly Global’s current-year earnings indicates a 53.9% year-over-year improvement. RELY beat earnings estimates in two of the trailing four quarters and missed twice, with an average surprise of 8%. The consensus estimate for current-year revenues suggests 31.8% year-over-year growth.
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Should Mastercard's $2.65B Recorded Future Buyout Get You Excited?
Mastercard Incorporated (MA - Free Report) recently agreed to acquire Recorded Future, a leading global threat intelligence company, for $2.65 billion. This acquisition is aimed at enhancing Mastercard's cybersecurity capabilities to protect the payments system and provide a more comprehensive cyber defense for its clients.
By integrating Recorded Future’s AI-powered threat intelligence and analytics, Mastercard plans to strengthen its ability to prevent cyber threats, fraud and data breaches, both in payments and across other digital environments. MA is acquiring the company from private equity firm Insight Partners, and the deal is expected to close by the first quarter of next year. Insight Partners grabbed a controlling stake in the acquiree in 2019 through an all-cash transaction that valued it at over $780 million.
Why MA Chose Recorded Future?
The acquisition not only strengthens Mastercard's cybersecurity foothold but also aligns with its strategy to build trust and resilience in digital transactions, making it a valuable addition to its existing services. Recorded Future serves more than 1,900 clients across 75 countries. Its client base includes government organizations in 45 countries and more than 50% of businesses in the Fortune 100. This extensive reach demonstrates its significant influence and presence in the global cybersecurity market.
For Mastercard, this strengthened security can attract more clients and deepen relationships with existing customers, potentially increasing revenues. Additionally, the acquisition can open new revenue streams in cybersecurity services and provide opportunities for product innovation, which can further drive growth and profitability for Mastercard.
Exciting Numbers Ahead for MA?
The demand for Mastercard’s service offerings, like cybersecurity and data analytics, surged during COVID-19, providing revenue diversification benefits. Revenues from Value-Added Services grew 17.7% in 2023 and 16.7% in the first half of 2024. The added capabilities from the Recorded Future acquisition will further boost these numbers. MA expects cybercrime to cost $9.2 trillion globally this year alone.
MA's Price Performance
Shares of Mastercard have gained 18.3% in the past year compared with the industry’s 15.8% growth.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Mastercard currently carries a Zacks Rank #3 (Hold).
Investors can look at some better-ranked stocks from the broader Business Services space like Fidelity National Information Services, Inc. (FIS - Free Report) , Paysign, Inc. (PAYS - Free Report) and Remitly Global, Inc. (RELY - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Fidelity National’s current-year earnings indicates a 50.7% year-over-year jump. FIS beat earnings estimates in two of the trailing four quarters and missed twice. The consensus estimate for current-year revenues is pegged at $10.2 billion.
The Zacks Consensus Estimate for Paysign’s current-year bottom line indicates 75% year-over-year growth. The consensus estimate for PAYS’ current-year top line is pegged at $58 million, suggesting 22.6% year-over-year growth.
The Zacks Consensus Estimate for Remitly Global’s current-year earnings indicates a 53.9% year-over-year improvement. RELY beat earnings estimates in two of the trailing four quarters and missed twice, with an average surprise of 8%. The consensus estimate for current-year revenues suggests 31.8% year-over-year growth.