Mastercard Inc

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MA : NYSE : Financial
$130.99 up 1.01 | 0.78%
Today's Range: 129.76 - 131.18
Avg. Daily Volume: 3248600.0
07/26/17 - 4:02 PM ET

Financial Analysis


MASTERCARD INC's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Sales and net income have grown, and although the growth in revenues has outpaced the average competitor within the industry, the net income growth has not. MASTERCARD INC has strong liquidity. Currently, the Quick Ratio is 1.53 which shows the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 2.40% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)2734.02446.0
EBITDA ($mil)1613.01443.0
EBIT ($mil)1521.01348.0
Net Income ($mil)1081.0959.0


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)8203.06750.0
Total Assets ($mil)18570.015905.0
Total Debt ($mil)5216.03333.0
Equity ($mil)5611.05479.0


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin59.058.99
EBITDA Margin58.9958.99
Operating Margin55.6355.11
Sales Turnover0.60.62
Return on Assets22.5123.55
Return on Equity74.5168.38
Debt Q1 FY17 Q1 FY16
Current Ratio1.821.65
Debt/Capital0.480.38
Interest Expense39.020.0
Interest Coverage39.067.4


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)1074.01102.0
Div / share0.220.19
EPS1.00.86
Book value / share5.224.97
Institutional Own % n/a n/a
Avg Daily Volume3215989.02998284.0

Valuation


BUY. MASTERCARD INC's P/E ratio indicates a premium compared to an average of 31.03 for the IT Services industry and a premium compared to the S&P 500 average of 24.66. For additional comparison, its price-to-book ratio of 24.59 indicates a significant premium versus the S&P 500 average of 3.07 and a significant premium versus the industry average of 10.05. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, MASTERCARD INC proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
MA 33.54 Peers 31.03   MA 32.71 Peers 20.16

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

MA is trading at a valuation on par with its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

MA is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
MA 25.64 Peers 23.07   MA 1.96 Peers 1.67

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

MA is trading at a significant premium to its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

MA trades at a premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
MA 24.59 Peers 10.05   MA 15.36 Peers 8.14

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

MA is trading at a significant premium to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

MA is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
MA 12.47 Peers 5.83   MA 11.94 Peers 12.37

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

MA is trading at a significant premium to its industry.

 

Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.

MA is keeping pace with its peers on the basis of sales growth.

 

 

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