There are some things money can't buy. For everything else, there's Mastercard!!!

MasterCard is a technology driven transactions and payments processing platform providing services in US and internationally offering its payment solutions and services under the MasterCard, Maestro, and Cirrus brands. For H12020, the Company reported revenues of US$ 7.3 Bn as compared with US$ 8.0 Bn in the corresponding period last year, registering a YoY decline of 8%. The Company’s operating income was recorded at US$ 3.9 Bn for H12020 registering a YoY decline of 15% whereas net income was recorded at US$ 3.1 Bn as compared with US$ 3.9 Bn in H12019 registering a YoY decline of 20%. The decline in revenue and income variables was due to the impact of covid-19 pandemic and associated lockdowns resulting in a 1% decrease in gross dollar volume of transactions to US$2.9 trillion and a decrease in cross-border volume of transactions (i.e. the value of transactions made between shoppers and merchants originating in different countries) of 24% YoY. The Company management has highlighted that the outlook for their volumes are improving and could continue to get better even before a covid-19 vaccine becomes widely available as the Company has continued to see some signs of recovery in transaction volumes across Europe with the easing of lockdowns. The Company management has highlighted that the “other revenue” line that includes cybersecurity tools, data analytics, and other services, was up 19% YoY driven mainly by booming demand for the Company’s cyber & intelligence and data & services solutions. Another area supporting the revenue performance is contactless transactions that represented 37% of transactions made in person during Q2-2020 as compared with 28% in Q2-2019. Amidst all the negativity surrounding covid-19, the pandemic has promoted the use of e-commerce with skeptics having to dive into online purchases out of necessity, including for basic things like online grocery orders. A lot of these newly turned converts to ecommerce are expected to retain their habits from an online commerce standpoint. MasterCard benefits from greater e-commerce adoption as this cuts into purchases that may have otherwise been made with cash or checks. The Company’s balance sheet remains strong with total assets of US$ 32.1 Bn financed; circa 20% by equity of US$ 6.49 Bn. Cash and cash equivalents were recorded at US$ 11.1 Bn as of June 2020 (Dec 2019: US$ 6.9 Bn ) however this was supported mainly on account of increase in Long term Debt from US$ 8.5 Bn in Dec 2019 to US$ 12.5 Bn in June 2020. Some of the increase in cash was also due to the improvement in operating cash flow from operations of US$ 3.3 Bn (YoY increase of 17.8%).

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There are some things money can't buy. For everything else, there's Mastercard!!!

Sep 28, 2020

bullish

fundamentals Analysis

[2 min Read]

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Photo by: Leon Bredella

MasterCard is a technology driven transactions and payments processing platform providing services in US and internationally offering its payment solutions and services under the MasterCard, Maestro, and Cirrus brands. For H12020, the Company reported revenues of US$ 7.3 Bn as compared with US$ 8.0 Bn in the corresponding period last year, registering a YoY decline of 8%. The Company’s operating income was recorded at US$ 3.9 Bn for H12020 registering a YoY decline of 15% whereas net income was recorded at US$ 3.1 Bn as compared with US$ 3.9 Bn in H12019 registering a YoY decline of 20%. The decline in revenue and income variables was due to the impact of covid-19 pandemic and associated lockdowns resulting in a 1% decrease in gross dollar volume of transactions to US$2.9 trillion and a decrease in cross-border volume of transactions (i.e. the value of transactions made between shoppers and merchants originating in different countries) of 24% YoY. The Company management has highlighted that the outlook for their volumes are improving and could continue to get better even before a covid-19 vaccine becomes widely available as the Company has continued to see some signs of recovery in transaction volumes across Europe with the easing of lockdowns. The Company management has highlighted that the “other revenue” line that includes cybersecurity tools, data analytics, and other services, was up 19% YoY driven mainly by booming demand for the Company’s cyber & intelligence and data & services solutions. Another area supporting the revenue performance is contactless transactions that represented 37% of transactions made in person during Q2-2020 as compared with 28% in Q2-2019. Amidst all the negativity surrounding covid-19, the pandemic has promoted the use of e-commerce with skeptics having to dive into online purchases out of necessity, including for basic things like online grocery orders. A lot of these newly turned converts to ecommerce are expected to retain their habits from an online commerce standpoint. MasterCard benefits from greater e-commerce adoption as this cuts into purchases that may have otherwise been made with cash or checks. The Company’s balance sheet remains strong with total assets of US$ 32.1 Bn financed; circa 20% by equity of US$ 6.49 Bn. Cash and cash equivalents were recorded at US$ 11.1 Bn as of June 2020 (Dec 2019: US$ 6.9 Bn ) however this was supported mainly on account of increase in Long term Debt from US$ 8.5 Bn in Dec 2019 to US$ 12.5 Bn in June 2020. Some of the increase in cash was also due to the improvement in operating cash flow from operations of US$ 3.3 Bn (YoY increase of 17.8%).
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MA

Mastercard Incorporated

318.20

-0.04
-0.01%

Return

-6.09%
Change % Since Posting
-20.65
Change Since Posting
338.85
Price When Posted

Metrics

367.25
Target Price
6/ 10
Confidence
1-2 Weeks
Timeframe
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Earnings Per Share
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Financials
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Management
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Price to Earnings Ratio
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Dividend
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Other Catalyst

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