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In the ever-changing and fiercely competitive business landscape, conducting thorough company analysis is crucial for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Mastercard (NYSE:MA) and its primary competitors in the Financial Services industry. By closely examining key financial metrics, market position, and growth prospects, our aim is to provide valuable insights for investors and shed light on company's performance within the industry.
Mastercard is the second-largest payment processor in the world, having processed close to over $9 trillion in volume during 2023. 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 | 35.38 | 57.12 | 16.29 | 42.49% | $3.92 | $4.83 | 10.44% |
| Visa Inc | 30.31 | 14.03 | 16.33 | 11.86% | $5.84 | $6.98 | 9.89% |
| Fiserv Inc | 27.85 | 3.02 | 4.64 | 2.51% | $1.96 | $2.88 | 7.39% |
| PayPal Holdings Inc | 15.66 | 3.14 | 2.23 | 4.25% | $1.56 | $3.46 | 9.36% |
| Fidelity National Information Services Inc | 104.35 | 2.32 | 4.46 | 3.9% | $0.8 | $0.92 | 2.92% |
| Block Inc | 110.13 | 2.15 | 1.78 | 2.51% | $0.51 | $2.09 | 19.38% |
| Global Payments Inc | 20.17 | 1.17 | 2.70 | 1.39% | $0.95 | $1.5 | 5.57% |
| Corpay Inc | 19.58 | 5.68 | 5.15 | 7.03% | $0.48 | $0.73 | 3.76% |
| Jack Henry & Associates Inc | 31.32 | 6.66 | 5.42 | 4.97% | $0.17 | $0.21 | 5.9% |
| WEX Inc | 30.04 | 4.35 | 3.07 | 3.66% | $0.23 | $0.39 | 6.65% |
| Euronet Worldwide Inc | 19.88 | 4.15 | 1.52 | 2.1% | $0.09 | $0.32 | 8.87% |
| StoneCo Ltd | 14.18 | 1.53 | 2 | 2.52% | $0.9 | $2.14 | 15.45% |
| The Western Union Co | 7.54 | 10.84 | 1.06 | 32.55% | $0.24 | $0.41 | 1.18% |
| Shift4 Payments Inc | 44.67 | 6.33 | 1.52 | 3.1% | $0.1 | $0.19 | 29.32% |
| PagSeguro Digital Ltd | 11.40 | 1.45 | 2.18 | 3.57% | $1.77 | $0.2 | 10.15% |
| DLocal Ltd | 21.41 | 5.71 | 4.09 | 3.8% | $0.05 | $0.06 | 34.34% |
| Paymentus Holdings Inc | 83.09 | 5.40 | 3.69 | 1.66% | $0.02 | $0.05 | 24.64% |
| Evertec Inc | 35.87 | 4.51 | 3.17 | 2.9% | $0.07 | $0.1 | 28.47% |
| Payoneer Global Inc | 20.13 | 3.41 | 2.72 | 4.37% | $0.05 | $0.19 | 18.84% |
| Average | 35.98 | 4.77 | 3.76 | 5.48% | $0.88 | $1.27 | 13.45% |
After examining Mastercard, the following trends can be inferred:
A Price to Earnings ratio of 35.38 significantly below the industry average by 0.98x suggests undervaluation. This can make the stock appealing for those seeking growth.
The elevated Price to Book ratio of 57.12 relative to the industry average by 11.97x suggests company might be overvalued based on its book value.
The stock's relatively high Price to Sales ratio of 16.29, surpassing the industry average by 4.33x, may indicate an aspect of overvaluation in terms of sales performance.
The company has a higher Return on Equity (ROE) of 42.49%, which is 37.01% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.
With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.92 Billion, which is 4.45x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
With higher gross profit of $4.83 Billion, which indicates 3.8x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
The company's revenue growth of 10.44% is significantly lower compared to the industry average of 13.45%. This indicates a potential fall in the company's sales performance.
The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile of a company.
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 assessing Mastercard against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
Compared to its top 4 peers, Mastercard has a stronger financial position indicated by its lower debt-to-equity ratio of 2.16.
This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute by investors.
For Mastercard, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB and PS ratios suggest strong market sentiment and premium valuation. In terms of ROE, EBITDA, and gross profit, Mastercard demonstrates high profitability and operational efficiency. However, the low revenue growth may raise concerns about future performance compared to industry peers in the Financial Services sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: MA
