What To Expect From MasterCard’s Q4 Earnings

MasterCard (NYSE: MA) had a fairly strong 2017, as the company managed to grow its revenue, net of client incentives, by 15% in the first 9 months of the year, and its stock price increased by over 40% over the year. The company grew its revenue across streams, with the strongest growth coming from transaction fees, which increased by 18%. We expect the company to report another strong set of quarterly results on February 1. We have also created an interactive dashboard where you can change the company’s expected revenue, margins, and other key drivers to gauge how they would impact expected earnings for the quarter.

Over the last several years, MasterCard has been spending heavily on marketing and promotions and rebates for customers, in order to bring in more partners into its payment network. We expect it will realize the benefits of these efforts over the next few years, and as a result, much of its overall revenue growth will likely come from growth in transaction fees.

MasterCard has been focused on growing its portfolio of co-branding partners and improving its technology to keep pace with the rapidly evolving payments space. Recent deals with American Airlines, Bed Bath & Beyond, and PayPal in the U.S., Walmart in Canada and China, Axis Bank in India, and Amadeus (an international travel company) will help MasterCard on this front. These partnerships should help bring in more customers and also boost its spending per customer.

Our $109 price estimate for MasterCard is around 25% below the current market price.

Please refer to our complete analysis for MasterCard

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