Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating Mastercard MA in comparison to its major competitors within the Financial Services industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in the industry.
Mastercard Background
Mastercard is the second-largest payment processor in the world, having processed close to over $8 trillion in transactions during 2022. Mastercard operates in over 200 countries and processes transactions in over 150 currencies.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Mastercard Inc | 40.20 | 64.03 | 17.93 | 42.16% | $3.67 | $5.02 | 12.57% |
| Visa Inc | 32.85 | 14.54 | 17.70 | 12.46% | $6.48 | $6.97 | 8.8% |
| Fiserv Inc | 30.33 | 2.99 | 4.87 | 2.93% | $2.16 | $3.08 | 6.18% |
| PayPal Holdings Inc | 16.26 | 3.18 | 2.32 | 6.87% | $2.14 | $3.67 | 8.71% |
| Block Inc | 4286 | 2.82 | 2.40 | 0.98% | $0.15 | $2.03 | 24.13% |
| Fidelity National Information Services Inc | 81.06 | 2.08 | 4.15 | 1.3% | $0.66 | $0.97 | -0.59% |
| Global Payments Inc | 35.54 | 1.50 | 3.63 | 1.59% | $0.99 | $1.51 | 8.03% |
| Fleetcor Technologies Inc | 22.65 | 6.54 | 5.92 | 8.07% | $0.51 | $0.74 | 6.08% |
| Jack Henry & Associates Inc | 33.73 | 7.28 | 5.83 | 5.43% | $0.17 | $0.22 | 7.99% |
| WEX Inc | 37.89 | 5.35 | 3.97 | 4.83% | $0.27 | $0.41 | 7.21% |
| StoneCo Ltd | 27.39 | 1.91 | 2.48 | 2.94% | $0.9 | $2.18 | 25.35% |
| DLocal Ltd | 39.04 | 11.81 | 9.37 | 9.84% | $0.1 | $0.07 | 46.54% |
| Shift4 Payments Inc | 55.94 | 7.64 | 1.90 | 2.6% | $0.09 | $0.2 | 31.19% |
| Euronet Worldwide Inc | 19.34 | 3.90 | 1.49 | 5.79% | $0.15 | $0.36 | 10.63% |
| The Western Union Co | 8.07 | 9.68 | 1.16 | 23.25% | $0.22 | $0.4 | -3.63% |
| PagSeguro Digital Ltd | 13.66 | 1.74 | 2.50 | 3.74% | $1.79 | $0.2 | 7.56% |
| Paymentus Holdings Inc | 138.17 | 7.17 | 5.06 | 2.22% | $0.02 | $0.05 | 24.68% |
| Evertec Inc | 31.28 | 4.17 | 3.59 | 2.04% | $0.06 | $0.1 | 20.29% |
| Payoneer Global Inc | 18.58 | 2.48 | 2.11 | 4.15% | $0.03 | $0.19 | 22.21% |
| Average | 273.77 | 5.38 | 4.47 | 5.61% | $0.94 | $1.3 | 14.52% |
Through a detailed examination of Mastercard, we can deduce the following trends:
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A Price to Earnings ratio of 40.2 significantly below the industry average by 0.15x suggests undervaluation. This can make the stock appealing for those seeking growth.
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With a Price to Book ratio of 64.03, which is 11.9x the industry average, Mastercard might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
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With a relatively high Price to Sales ratio of 17.93, which is 4.01x the industry average, the stock might be considered overvalued based on sales performance.
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The company has a higher Return on Equity (ROE) of 42.16%, which is 36.55% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
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The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.67 Billion, which is 3.9x above the industry average, implying stronger profitability and robust cash flow generation.
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With higher gross profit of $5.02 Billion, which indicates 3.86x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 12.57% is significantly lower compared to the industry average of 14.52%. This indicates a potential fall in the company's sales performance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When examining Mastercard in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
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Among its top 4 peers, Mastercard is placed in the middle with a moderate debt-to-equity ratio of 2.26.
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This implies a balanced financial structure, with a reasonable proportion of debt and equity.
Key Takeaways
For Mastercard, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB and PS ratios suggest strong market sentiment and revenue multiples. Mastercard's high ROE, EBITDA, and gross profit reflect efficient operations and profitability. However, the low revenue growth may indicate a need for strategic expansion to align with industry trends.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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