* Note: Prices are in Million (M) USD.
Description:
Mastercard Incorporated is an American multinational financial services corporation headquartered in the Mastercard International Global Headquarters in Purchase, New York. The Global Operations Headquarters is located in O'Fallon, Missouri, a municipality of St. Charles County, Missouri. Throughout the world, its principal business is to process payments between the banks of merchants and the card-issuing banks or credit unions of the purchasers who use the Mastercard brand debit, credit and prepaid cards to make purchases. Mastercard Worldwide has been a publicly traded company since 2006.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $8,442 M
Debt : $18,226 M
EBITDA : $18,773 M
Net Debt (Debt - Cash): $9,784 M
Since Net Debt is covered by EBITDA within 1 year, 3 points assigned.
This criteria used industry in which company operates:
Sector: Financial services
Industry: Credit services
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 33.34
Since Forward PE Ratio is between 25 - 35, 1 point assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 20 overlapping fiscal years (max 20).Average Free Cash Flow: $4,691 M
Average Revenue: $11,614 M
Revenue Converted To Free Cash Flow (%): 40.4%
Since Free Cash Flow (FCF) to Revenue percentage is greater than 25, 5 points assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $28,167 M
Revenue 4 Years Ago (2020-12-31): $15,301 M
Last 5 Years Average Revenue Growth: 17%
Since Revenue Growth is between 15 - 20, 4 points assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $927 M
Share Count 5 Years Ago (2020-12-31): $1,006 M
Company is buying back its own shares, 3 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $19.07
Trailing 12-Month Earnings Per Share (EPS): $16.35
Average Earnings Per Share (EPS): $17.71
Dividend Per Share (DPS): $3
Payout Ratio: 17%
Dividend Yield: 1%
Since company Payout Ratio is less than 50, 2 points assigned.
Since Dividend Yield is less than 1, 0 point assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 20 valid ROE years (max 20).Average ROE: 74.1%
Since Average ROE is greater than 20, 5 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $590
52-Week Low: $459
Threshold Price (15% Above 52-Week Low): $528
Since Current price is not within 15% threshold, 0 point assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $519,066 M
Since Market Cap is between 500B - 1 Trillion, 4 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 4% exposure of Total Portfolio.
Value-Trade has assigned 30 points to above Mastercard Inc (MA) stock.
Heads up: One or more P/E inputs look exaggerated and may skew the blend.
• RCFC Based PE
44.31 (>2× median)
• ROE Based PE
50.00 (>2× median)
Further research is recommended; please use your own due diligence.In such cases, multiplying earnings by the long-run average P/E typically gives a closer, more reliable fair value.
Rule of thumb: Last 10 Years Avg P/E (33.03)
× EPS ($17.71) = $584.96.
Last 10 Years Avg PE 33.03, Fair Value PE 15, Industry Based PE 20, Growth Based PE 16, RCFC Based PE 44.31, ROE Based PE 50, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 27.92. Value-Trades has assined P/E value 27.92. Since an average (Current Year EPS + Next Year EPS) earning per share is $17.71.
The fair value of Mastercard Inc (MA) stock should be (27.92 x $17.71) = $494.42.
