One-glance verdict
Undervalued
$811.75 our estimate vs market $620.42
Wall Street consensus: $674.25 (-16.9% lower than our fair-value estimate)
24% below our estimate, below the bear case
Fundamentals snapshot
Mastercard Incorporated
MA · NYQ · Financial Services · Credit Services
Current price
$620.42
52-week range
$464.52 - $624.29
Market cap
$543.49B
Balance sheet
Stretched
27.03x Strong cushion
Net debt $13.03B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 7.0% last year.
- Reward Returns 241.2% on equity, ahead of 80% of its peers.
- Risk Net debt grew 22.5% over 3 years.
- Risk Insider ownership is only 0.1% (peer median: 0.8%).
What this company does
Mastercard Incorporated
Mastercard makes money by processing payments for banks and merchants, essentially acting as a middleman for every swipe or tap of a card. This business model means they earn a small fee on each transaction, leading to consistent revenue, and because they don't hold inventory or manufacture anything, their operating margins (the profit left after paying for the day-to-day running of the business) are typically very healthy. Their importance comes from facilitating commerce by making it easy and secure for money to move between buyers and sellers.
How the company got here
Mastercard started in 1966 as a group of banks created a network to compete with American Express. This network eventually became MasterCard Worldwide. Over the decades, it evolved from a simple card association into a global technology company focused on facilitating payments. A key turning point was its initial public offering (IPO) in 2006, which transformed it into a publicly traded entity and provided capital for further expansion and technological development. This allowed Mastercard to invest heavily in its infrastructure and services, solidifying its position in the financial services sector.
What it actually does
Mastercard is essentially a technology company that connects consumers, businesses, and banks to make payments happen. When you swipe your Mastercard, it's not the card itself that holds your money, but rather Mastercard's network that securely processes the transaction between your bank and the merchant's bank. They provide the "rails" for these payments to travel, ensuring speed and security. Think of them as the digital highway for money movement, enabling everything from your daily coffee purchase to large business transactions.
Services
This is Mastercard's largest business segment, encompassing the core transaction processing that enables credit, debit, and prepaid card payments. When a customer uses a Mastercard-branded card, Mastercard facilitates the communication between the issuing bank (your bank) and the acquiring bank (the merchant's bank), charging fees for this service. This segment also includes services like fraud protection and data analytics that help banks and merchants manage their payment operations more effectively. It represents the vast majority of Mastercard's revenue, as it's the foundation of their payment network.
Data & Services
Beyond just processing transactions, Mastercard offers a suite of value-added services to its clients, which include banks, merchants, and governments. This segment provides solutions like cybersecurity tools to prevent fraud, loyalty programs that reward cardholders, consulting services to help businesses optimize their payment strategies, and advanced data analytics to understand consumer behavior. These services help clients make more informed decisions and improve their customer offerings, generating a growing portion of Mastercard's overall income.
What management is betting on now
Mastercard's strategic focus is on expanding beyond traditional card payments into new areas of money movement and digital commerce. They are investing in real-time payments, which allow for instant fund transfers, and expanding their reach into business-to-business (B2B) payments, a large and often inefficient market. Management is also prioritizing the development of advanced data analytics and artificial intelligence (AI) solutions to offer more sophisticated insights and security services to their clients. The goal is to become a comprehensive digital payment and intelligence partner for businesses and consumers globally.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$5.03B
FY2024 Q4
$4.74B
FY2025 Q1
$2.22B
FY2025 Q2
$4.56B
FY2025 Q3
$5.49B
FY2025 Q4
$4.89B
FY2026 Q1
$2.85B
FY2026 Q2
$3.48B
Revenue
$9.28B
Net income
—
Diluted EPS
4.97
Operating cash flow
$3.77B
Free cash flow
$3.48B
Fetching…
Sources
Revenue
$8.40B
Net income
—
Diluted EPS
4.35
Operating cash flow
$3.00B
Free cash flow
$2.85B
Fetching…
Sources
Revenue
$8.81B
Net income
—
Diluted EPS
4.52
Operating cash flow
$5.00B
Free cash flow
$4.89B
Fetching…
Sources
Revenue
$8.60B
Net income
—
Diluted EPS
4.34
Operating cash flow
$5.66B
Free cash flow
$5.49B
Fetching…
Sources
Revenue
$8.13B
Net income
—
Diluted EPS
4.07
Operating cash flow
$4.60B
Free cash flow
$4.56B
Fetching…
Sources
Revenue
$7.25B
Net income
—
Diluted EPS
3.59
Operating cash flow
$2.38B
Free cash flow
$2.22B
Fetching…
Sources
Revenue
$7.49B
Net income
—
Diluted EPS
3.64
Operating cash flow
$4.83B
Free cash flow
$4.74B
Fetching…
Sources
Revenue
$7.37B
Net income
—
Diluted EPS
3.53
Operating cash flow
$5.14B
Free cash flow
$5.03B
Fetching…
Sources
Is it cheap or expensive?
Fair value $811.75 vs current price $620.42
Wall Street consensus is the average analyst price target: $674.25 (-16.9% lower than our fair-value estimate).
Our most-likely fair value is $811.75 a share — about 30.8% above today's price of $620.42, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $13.0B. Interest coverage 27.0x.
Net debt
$13.03B
Interest coverage
27.03x
Mastercard Incorporated's profit covers its interest bill about 27.0 times over. which is stronger than most peers shown here.
Stretched
Worse cushion
Baseline
Better cushion
MA
BASELINE
Mastercard Incorporated
Total debt $24.64B Interest coverage 27.03x This is the baseline the peer rows are being compared against.
Total debt $23.86B Interest coverage 45.09x +67% vs MA Carries about 1.7x more debt cushion than MA.
Total debt $14.22B Interest coverage 14.50x -46% vs MA Carries about 1.9x less debt cushion than MA.
Total debt — Interest coverage 3.72x -86% vs MA Carries about 7.3x less debt cushion than MA.
Total debt $23.56B Interest coverage 2.27x -92% vs MA Carries about 11.9x less debt cushion than MA.
What you should know
The case for and against MA
3 Rewards
2 Risks
Rewards
-
Revenue grew 7.0% last year.
-
Returns 241.2% on equity, ahead of 80% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Net debt grew 22.5% over 3 years.
-
Insider ownership is only 0.1% (peer median: 0.8%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
33.90x
Forward P/E
26.89x
P/B
97.00x
P/S
15.49x
EV/EBITDA
25.07x
PEG ratio
1.61x
Profitability
How much profit each dollar creates
Gross margin
100.0%
Operating margin
61.1%
Net margin
46.3%
ROE
241.2%
ROA
24.1%
Health
Liquidity and balance-sheet strength
Debt / equity
4.40x
Current ratio
1.06x
Quick ratio
0.67x
Total debt
$24.64B
Total cash
$11.61B
Growth
How the business has been compounding
Revenue TTM
$35.08B
Revenue 5Y CAGR
14.8%
EPS TTM
18.30
EPS 5Y CAGR
17.4%
Cash flow
How much cash the business throws off
Operating CF TTM
$17.44B
Free CF TTM
$17.16B
FCF margin
48.9%
Dividend
Shareholder payout
Yield
0.6%
Payout ratio
17.9%
Last ex-div date
2026-10-09