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International and services growth could extend the earnings runway.
International Markets revenue growth falls below 6% in FY2028.
Hold. The report was prepared at $579.21, below Fair value of $621.75 and Potential value of $782.35.3
The main risk is slower international growth after FY2027. A breach of the FY2028 growth floor would shorten the earnings runway and reduce what investors pay for future profit.
International scale and a material services line could extend revenue growth. FY2025 free cash flow and low capex provide distribution capacity, while higher earnings per share still require diluted shares to keep falling.345
Payment Network revenue reached $19.48 billion in FY2025, showing substantial coordination across both sides of the payment system.5
Services generated $13.32 billion in FY2025, but product revenue alone does not establish contract duration, retention, or replacement costs.5
A close global network competitor exists, while the other selected peers use materially different processing, lending, or banking models.
Hold because supported upside remains visible, but post-FY2027 growth duration needs further operating proof.
Services and other solutions. Its services and other solutions, which are interdependent with its payment network, drive value for its customers and the broader payments ecosystem. Mastercard Incorporated offers security solutions, consumer acquisition and engagement, business and market insights, digital and authentication, processing and gateway and other solutions (including ACH batch and real-time account-based payments and solutions and open finance).
Mastercard Incorporated provides a wide variety of products and services that support payment products that customers can offer to consumers and merchants to enable purchase transactions, cash withdrawals and cash advances. These offerings facilitate transactions across its payment network and platforms among account holders, merchants, financial institutions, digital partners, businesses, governments and other organizations in markets globally.
Growth-duration, margin, repurchase, and required-return stresses are standalone outcomes and should not be added together.
FY2025 Payment Network revenue was $19.48 billion, and the peer set identifies one close global network competitor. These facts support scale, but not direct proof of customer switching costs.
Services adds breadth, but its disclosed size does not prove strong customer retention or superior margins. Its structural contribution remains conditional on outgrowing the core network.
FY2025 operating income was $19.51 billion on $32.79 billion of revenue. This demonstrates strong operating economics, but it does not alone prove the duration of returns above capital costs.3
The highlighted cell is Fair value when every assumption sits at its base level ($621.75). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $17.5B after modeled capex of $489.0M, with terminal value at 68.2% of . A sudden drop in free cash flow is not projected unless capital spending relative to , reinvestment, or resets materially.
Rising annual forecasts would strengthen near-term earnings visibility.
Stable forecasts would leave the established thesis unchanged.
Falling forecasts would weaken the expected growth path.
Industry capital spending equals 2.4% of revenue, while capital spending to depreciation is 0.9. These September 2026 benchmarks indicate restrained physical investment.
Annual FY2026 and FY2027 revenue forecasts rose after the July event. That supports a near-term demand-led upswing, but persistence still depends on reported revenue meeting those forecasts.
A down-cycle would be visible through slower Payment Network growth or lower consolidated margin. Because the network is the largest disclosed product line, either outcome would weigh heavily on sales and profit.
Existing allocation only; no new percentage is prescribed. The Hold view reflects limited upside to Fair value and material post-FY2027 uncertainty. Maintain exposure only within an existing diversified allocation.
Keep the position unchanged unless operating evidence improves. A breach of any stated growth, margin, or share-count threshold should prompt review before continued exposure.
Cash generation and declining shares support continued ownership, but the valuation gap is not large enough to justify increasing exposure.4
Defer a new position until services growth, international duration, and repurchase capacity receive stronger FY2027 or FY2028 confirmation.
Maintain only an existing allocation because the premium forward valuation remains sensitive to small changes in growth duration.3
Hold existing shares; do not increase exposure at the report-date price.
Fair value is $621.75 versus the $579.21 report-date price, leaving supported upside but limited room for long-duration forecast errors.
Capture your own thesis, position size, and follow-up questions. Stays on this device, only you can see it.
The records this analysis drew on, as they stood when it was run.
This path would shorten earnings growth, weaken per-share compounding, and cause investors to pay less for future profit. It is disconfirmed if the stated FY2027 and FY2028 operating tests hold.
FY2028 international growth falls below 6%, shortening the premium growth period.
Core pricing or service costs hold operating margin below 55% for two fiscal years.
FY2027 diluted shares exceed 906 million, removing the repurchase-led earnings boost.
The moderate cost of equity rises above 10.2394%, compressing long-duration value.
The five developments that would weaken our investment case.
If international growth weakens past this point, the larger geography would no longer support the longer revenue runway. Lower future sales growth would reduce expected earnings and may lead investors to pay less for those earnings.
Current:FY2025 filing: $18.75 billion
Alert ifBelow 6% in FY2028
A sustained margin breach would indicate weaker network pricing or higher service costs. Less operating profit from each revenue dollar would reduce earnings and cash while weakening evidence that the franchise can sustain premium economics.
Current:FY2025: $19.51 billion operating income on $32.79 billion revenue
Alert ifBelow 55% for two fiscal years
A rising share count would show that repurchases no longer offset issuance. Earnings would then be spread across more shares, removing an important source of per-share growth even if revenue remains positive.
Current:FY2025: 906 million
Alert ifAbove 906 million in FY2027
A higher required return lowers the present value of distant cash flows even when operating forecasts are unchanged, making the valuation more sensitive to long-duration assumptions.
Current:September 8, 2026: 8.2394%
Alert ifAbove 10.2394% within 12 months
If services no longer outgrow the network, the second growth engine would stop extending the revenue runway. Consolidated growth would likely fade sooner, weakening the earnings path beyond FY2027.
Current:FY2025 services revenue: $13.32 billion
Alert ifGrowth spread at or below zero in FY2027 or FY2028
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
Project SBC-adjusted EPS, discount each year's earnings at cost of equity, then add a Gordon-growth terminal value.
Limitation: Terminal value is 70.6% of this model's value, above the 60% level at which the methodology flags concentration; the value leans on the years beyond the explicit forecast.
Project EPS through the explicit advantage period, fade growth as competition catches up, and discount the full stream at cost of equity.
Apply a terminal P/E to the dated forward EPS path, then discount that future share value back to the analysis date.
Convert the revenue and margin path into after-tax free cash flow, discount the annual per-share amounts and at , then adjust for signed per current share.
Add depreciation to net income, subtract maintenance capex, divide by diluted shares, and apply a normalized valuation multiple.
Multiply the peer median PEG by this stock's forecast growth to derive an implied forward P/E, then apply it to forward EPS.
Solve for the growth rate that makes the model value equal the report-date share price.
The base path assumes annual forecasts remain firm and operating margin stays at or above its accepted floor. It weakens if FY2027 diluted shares exceed 906 million or FY2028 international growth falls below its accepted floor.
Upside persists if international growth stays above its accepted FY2028 floor and services outgrows Payment Network through FY2028. Falling services growth relative to the network would disconfirm this path.5
FY2025 operating cash exceeded reported profit, supporting the link between earnings and cash generation.3
Pressure lowers profit and cash generation.3
Lagging services shortens the growth runway.5
Higher shares reduce earnings per share.4
Cuts would weaken near-term sales and earnings.1
| $18.88B |
| $22.24B |
| $25.10B |
| $28.17B |
| $32.79B |
| +14.8% |
| Gross profit | $18.88B | $22.24B | $25.10B | $28.17B | $32.79B | +14.8% |
| Operating income | $10.74B | $12.20B | $14.21B | $15.90B | $19.30B | +15.8% |
| Net income | $8.69B | $9.93B | $11.20B | $12.87B | $14.97B | +14.6% |
| EPS (diluted) | $8.41 | $10.65 | $12.26 | $14.61 | $17.02 | +19.3% |
| EBITDA | $11.46B | $12.95B | $15.01B | $16.80B | $20.44B | +15.6% |
| R&D | — | — | — | — | — | — |
| SG&A | $7.04B | $7.98B | $8.84B | $10.13B | $11.21B | +12.3% |
FY2025 operating cash was $17.40 billion and free cash flow was $16.91 billion. The small gap reflects low physical capital needs and supports the cash-based investment case.34
Debt was $19.0 billion versus $10.57 billion of cash in FY2025. Stock compensation of $597 million means future share reduction remains conditional, not automatic.
FY2025 operating income and low physical investment show strong operating economics, but those observations do not establish a return-on-invested-capital trend.
The dated WACC was 8.0601% on September 8, 2026. No ROIC comparison is asserted from the supplied operating figures alone.
FY2025 free cash flow was $16.91 billion, while capital spending was $489 million.
Most operating cash can support distributions, debt management, or reinvestment rather than physical asset replacement.
Diluted average shares fell from 946 million in FY2023 to 906 million in FY2025.
Continued net repurchases would let earnings per share grow faster than companywide profit, provided issuance does not offset purchases.
| Revenue | $32,791,000,000 |
|---|---|
| Cost of revenue | $0 |
| Gross profit | $32,791,000,000 |
| Operating expenses | $13,277,000,000 |
| Operating income | $19,514,000,000 |
| Non-operating items and tax | -$4,546,000,000 |
| Net income | $14,968,000,000 |
| Total assets | $54,157,000,000 |
|---|---|
| Cash | $10,566,000,000 |
| Current assets | $23,558,000,000 |
| Total liabilities | $46,411,000,000 |
| Current liabilities | $22,762,000,000 |
| Shareholders’ equity | $7,746,000,000 |
| Net income | $8,687,000,000 |
|---|---|
| Operating inflow | $9,686,000,000 |
| Depreciation and amortization | $726,000,000 |
| Stock-based compensation | $273,000,000 |
| Operating cash flow | $9,463,000,000 |
| Operating outflow | $223,000,000 |
| Cash available | $19,576,000,000 |
| Beginning cash | $10,113,000,000 |
| Investing outflow | $5,272,000,000 |
| Capex | $814,000,000 |
| Other investing activities | $4,458,000,000 |
| Financing outflow | $6,555,000,000 |
| Dividends paid | $1,741,000,000 |
| Other financing activities | $4,814,000,000 |
| Exchange-rate effect | $328,000,000 |
| Ending cash | $7,421,000,000 |
| Investing cash flow | -$5,272,000,000 |
| Financing cash flow | -$6,555,000,000 |
Source: SEC EDGAR · Filed 2026-02-11 · SEC EDGAR
| Revenue by business category | Revenue | Share | YoY |
|---|---|---|---|
| Payment Network | $19.5B | 59.4% | 12.4% |
| Value Added Services And Solutions | $13.3B | 40.6% | 22.9% |
Point-in-time financial data used in the 2026-09-08 analysis.
| Period | Revenue | EBITDA | Net income | Operating cash flow | Free cash flow | Capex | Depreciation and amortization | Stock-based compensation | Share repurchases | Dividends paid | Net debt issuance | Investing cash flow | Financing cash flow | Beginning cash | Ending cash | Cash and investments | Total debt | Operating margin | ROIC | WACC | ROIC − WACC spread |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016-12-31 | $10.8B | $6.1B | $4.1B | $4.5B | $4.1B | $382M | $373M | $101M | — | $837M | — | -$1.2B | -$2.3B | — | $6.7B | $8.3B | $5.2B | 53.5% | — | 6.6% | — |
| 2017-12-31 | $12.5B | $7.1B | $3.9B | $5.6B | $5.1B | $423M | $437M | $176M | — | $942M | — | -$1.8B | -$4.8B | $6.7B | $5.9B | $7.8B | $5.4B | 53.0% | — | 6.6% | — |
| 2018-12-31 | $15B | $7.8B | $5.9B | $6.2B | $5.7B | $504M | $459M | $196M | — | $1B | — | -$506M | -$5B | $5.9B | $6.7B | $8.4B | $6.3B | 48.7% | — | 6.7% | — |
| 2019-12-31 | $16.9B | $10.5B | $8.1B | $8.2B | $7.5B | $728M | $522M | $250M | — | $1.3B | — | -$1.6B | -$5.9B | $6.7B | $7B | $7.7B | $9.9B | 57.2% | — | 5.8% | — |
| 2020-12-31 | $15.3B | $8.7B | $6.4B | $7.2B | $6.5B | $708M | $580M | $254M | — | $1.6B | — | -$1.9B | -$2.2B | $7B | $10.1B | $10.6B | $12.7B | 52.8% | — | 4.9% | — |
| 2021-12-31 | $18.9B | $11.5B | $8.7B | $9.5B | $8.6B | $814M | $726M | $273M | — | $1.7B | — | -$5.3B | -$6.6B | $10.1B | $7.4B | $7.9B | $13.9B | 53.4% | — | 5.2% | — |
| 2022-12-31 | $22.2B | $13B | $9.9B | $11.2B | $10.1B | $1.1B | $750M | $295M | $8.8B | $1.9B | $399M | -$1.5B | -$10.3B | $9.9B | $7B | $7.4B | $14B | 57.2% | — | 7.8% | — |
| 2023-12-31 | $25.1B | $15B | $11.2B | $12B | $11.6B | $371M | $799M | $460M | $9B | $2.2B | $1.6B | -$1.4B | -$9.5B | $9.2B | $8.6B | $9.2B | $15.7B | 58.3% | — | 7.8% | — |
| 2024-12-31 | $28.2B | $16.8B | $12.9B | $14.8B | $14.3B | $474M | $897M | $526M | $11B | $2.4B | $2.6B | -$3.4B | -$10.8B | $10.5B | $8.4B | $8.8B | $18.2B | 58.0% | — | 8.4% | — |
| 2025-12-31 | $32.8B | $20.4B | $15B | $17.4B | $16.9B | $489M | $2.1B | $597M | $11.7B | $2.8B | $492M | -$1.4B | -$14.2B | $10.8B | $10.6B | $10.9B | $19B | 59.5% | — | 7.9% | — |
Mastercard Incorporated (MA) trades at 25.3x forward earnings against a peer median of 15.3x. Its EV/EBITDA of 23.4x compares with a peer median of 15.1x. The comparison uses 4 peers: Visa Inc., PayPal Holdings Inc., American Express Company and JPMorgan Chase & Co., as of 2026-09-07 to 2026-09-08.
| International payment growth | positive | International Markets is the larger disclosed geography, giving Mastercard more than one regional route to extend revenue growth. |
| Alternative payment methods | negative | Alternative payment methods could shorten the growth period if they weaken Payment Network growth or pricing. This is a conditional threat, not evidence that displacement is already occurring. |
International Markets generated $18.75 billion versus $14.04 billion in the Americas during FY2025. This breadth supports growth duration but adds currency and jurisdiction exposure.5
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
Limitation: Terminal value is 68.2% of this model's value, above the 60% level at which the methodology flags concentration; the value leans on the years beyond the explicit forecast.
| $22.54B |
| $25.39B |
| $28.06B |
| $30.58B |
| $32.88B |
| $35.01B |
| $37.04B |
| $38.97B |
| $40.76B |
| $42.39B |
| NOPAT | $18.54B | $20.88B | $23.07B | $25.15B | $27.03B | $28.79B | $30.46B | $32.05B | $33.52B | $34.86B |
| Residual cash after reinvestment policy | $18.54B | $20.88B | $23.07B | $25.15B | $27.03B | $28.79B | $30.46B | $32.05B | $33.52B | $34.86B |
| Revenue growth | 13.6% | 12.6% | 10.5% | 9.0% | 7.5% | 6.5% | 5.8% | 5.2% | 4.6% | 4.0% |
| Operating margin | 60.5% | 60.5% | 60.5% | 60.5% | 60.5% | 60.5% | 60.5% | 60.5% | 60.5% | 60.5% |
| Tax rate | 17.8% | 17.8% | 17.8% | 17.8% | 17.8% | 17.8% | 17.8% | 17.8% | 17.8% | 17.8% |
| Reinvestment rate | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Terminal growth | 3.6% | 3.6% | 3.6% | 3.6% | 3.6% | 3.6% | 3.6% | 3.6% | 3.6% | 3.6% |
| PayPal Holdings Inc. |
| 9.5x |
| 1.4x |
| 7.7x |
| 24.5% |
| 17.0% |
| AXP | American Express Company | 16.2x | 3.1x | 34.4% | 20.3% |
| JPM | JPMorgan Chase & Co. | 14.3x | 5.1x | 17.8% | 50.4% |
