In the current session, Mastercard Inc. (NYSE:MA) is trading at $312.15, after a 0.61% spike. Over the past month, the stock increased by 14.71%, and in the past year, by 18.31%. With performance like this, long-term shareholders optimistic but others are more likely to look into the price-to-earnings ratio to see if the stock might be overvalued.

Assuming that all other factors are held constant, this could present itself as an opportunity for shareholders trying to capitalize on the higher share price. The stock is currently under from its 52 week high by 10.11%.

Depending on the particular phase of a business cycle, some industries will perform better than others.

Compared to the aggregate P/E ratio of 18.37 in the Credit Services industry, Mastercard Inc. has a higher P/E ratio of 39.69. Shareholders might be inclined to think that Mastercard Inc. might perform better than its industry group. It’s also possible that the stock is overvalued.

There are many limitations to price to earnings ratio. It is sometimes difficult to determine the nature of the earnings makeup of a company. Shareholders might not get what they're looking for, from trailing earnings.