Within the finance sector over many years, Mastercard(NYSE: MA) has been one of the more popular stocks to own. Yet there was a distinct lack of love for the payment card giant on Wednesday, as investors traded out of the stock to the point where it lost 2% of its value.
The culprit? The company's latest set of quarterly results.
Double-digit increases
Revenue came in at $6.3 billion for Mastercard in its first quarter, which was 10% higher year over year. On a currency-neutral basis -- which matters, as the company operates around the world, and its native currency is the strong U.S. dollar -- that growth amounted to 11%. This was on the back of a nearly 9% increase in gross dollar volume (GDV) to almost $2.3 trillion.
Non-GAAP (generally accepted accounting principles) adjusted net income also saw a double-digit increase. It was 16% above the first-quarter 2023 figure on both an as-reported and currency-neutral basis, at $3.1 billion ($3.31 per share).
As in previous quarters, Mastercard's improvements came down to consumers swiping and tapping more with their plastic to buy stuff. What also helped was continued growth in cross-border commerce; this rose by 18% during the period.
The revenue miss was conspicuous
Yet the professionals tracking Mastercard thought a generally healthy global economy would more greatly enhance the company's top line. On average, they were estimating it would earn $6.34 billion in revenue, a miss that couldn't quite be offset in the investor mind with a good, if not spectacular, earnings beat -- collectively, the prognosticator forecast for per-share, adjusted net income was $3.24.
Should you invest $1,000 in Mastercard right now?
Before you buy stock in Mastercard, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Mastercard wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of April 30, 2024
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Mastercard. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.
