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In the dynamic and cutthroat world of business, conducting thorough company analysis is essential 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 | 36.33 | 58.65 | 16.73 | 42.49% | $3.92 | $4.83 | 10.44% |
| Visa Inc | 31.40 | 14.54 | 16.91 | 11.86% | $5.84 | $6.98 | 9.89% |
| Fiserv Inc | 28.93 | 3.13 | 4.82 | 2.51% | $1.96 | $2.88 | 7.39% |
| PayPal Holdings Inc | 15.85 | 3.18 | 2.26 | 4.25% | $1.56 | $3.46 | 9.36% |
| Block Inc | 118.85 | 2.32 | 1.92 | 2.51% | $0.51 | $2.09 | 19.38% |
| Fidelity National Information Services Inc | 103.67 | 2.30 | 4.43 | 3.9% | $0.8 | $0.92 | 2.92% |
| Global Payments Inc | 21.72 | 1.26 | 2.91 | 1.39% | $0.95 | $1.5 | 5.57% |
| Corpay Inc | 21.09 | 6.12 | 5.54 | 7.03% | $0.48 | $0.73 | 3.76% |
| Jack Henry & Associates Inc | 32.61 | 6.93 | 5.64 | 4.97% | $0.17 | $0.21 | 5.9% |
| WEX Inc | 33.60 | 4.87 | 3.43 | 3.66% | $0.23 | $0.39 | 6.65% |
| Euronet Worldwide Inc | 20.16 | 4.21 | 1.54 | 2.1% | $0.09 | $0.32 | 8.87% |
| StoneCo Ltd | 17.83 | 1.79 | 2.37 | 4.53% | $1.13 | $2.3 | 20.35% |
| The Western Union Co | 7.87 | 11.31 | 1.11 | 32.55% | $0.24 | $0.41 | 1.18% |
| Shift4 Payments Inc | 45.51 | 6.35 | 1.55 | 2.6% | $0.09 | $0.2 | 31.19% |
| PagSeguro Digital Ltd | 12.57 | 1.53 | 2.30 | 3.74% | $1.79 | $0.2 | 5.94% |
| DLocal Ltd | 27.06 | 8.42 | 6.18 | 6.44% | $-0.02 | $0.07 | 58.75% |
| Evertec Inc | 37.66 | 4.73 | 3.32 | 2.9% | $0.07 | $0.1 | 28.47% |
| Paymentus Holdings Inc | 81.52 | 5.30 | 3.62 | 1.66% | $0.02 | $0.05 | 24.64% |
| Payoneer Global Inc | 19.47 | 3.30 | 2.63 | 4.37% | $0.05 | $0.19 | 18.84% |
| Average | 37.63 | 5.09 | 4.03 | 5.72% | $0.89 | $1.28 | 14.95% |
Upon a comprehensive analysis of Mastercard, the following trends can be discerned:
With a Price to Earnings ratio of 36.33, which is 0.97x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.
The elevated Price to Book ratio of 58.65 relative to the industry average by 11.52x suggests company might be overvalued based on its book value.
With a relatively high Price to Sales ratio of 16.73, which is 4.15x the industry average, the stock might be considered overvalued based on sales performance.
With a Return on Equity (ROE) of 42.49% that is 36.77% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $3.92 Billion, which is 4.4x above the industry average, implying stronger profitability and robust cash flow generation.
The company has higher gross profit of $4.83 Billion, which indicates 3.77x above the industry average, indicating stronger profitability and higher earnings from its core operations.
With a revenue growth of 10.44%, which is much lower than the industry average of 14.95%, the company is experiencing a notable slowdown in sales expansion.
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its equity.
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.
By analyzing Mastercard in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:
As Mastercard is in the middle of the list in terms of the debt-to-equity ratio, it suggests that the company has a moderate debt-to-equity ratio of 2.16 compared to the other companies.
This position indicates a relatively balanced financial structure, where the company maintains a reasonable level of debt while also leveraging equity for financing its operations.
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 rate 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
