NEW YORK (TheStreet) -- Shares of MasterCard (MA) - Get Mastercard Incorporated Class A Report rose 1.99% to $77.50 in after-hours trading Wednesday after fellow credit card giant Visa (V) - Get Visa Inc. Class A Report reported fourth-quarter earnings that surpassed analysts' expectations.
Visa reported a 17% year-over-year increase in adjusted earnings to $2.18 a share on revenue of $3.23 billion. The consensus estimate called for Visa to report earnings of $2.10 on revenue of $3.19 billion.
Adjusted net income rose 14% to $1.4 billion, while revenue increased 9% nominally compared to the previous year.
For the full year 2015, Visa expects constant dollar revenue growth in the low double digits and anticipates two percentage points of negative foreign currency impact.
MasterCard is scheduled to report its third-quarter earnings before the market open Thursday.
TheStreet Ratings team rates MASTERCARD INC as a "buy" with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate MASTERCARD INC (MA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 10.9%. Since the same quarter one year prior, revenues rose by 13.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MA's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, MA has a quick ratio of 1.51, which demonstrates the ability of the company to cover short-term liquidity needs.
- MASTERCARD INC has improved earnings per share by 14.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MASTERCARD INC increased its bottom line by earning $2.57 versus $2.19 in the prior year. This year, the market expects an improvement in earnings ($3.00 versus $2.57).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the IT Services industry average. The net income increased by 9.8% when compared to the same quarter one year prior, going from $848.00 million to $931.00 million.
- The gross profit margin for MASTERCARD INC is rather high; currently it is at 61.59%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 39.16% significantly outperformed against the industry average.
- You can view the full analysis from the report here: MA Ratings Report