MasterCard (MA) is an Incredible Growth Stock: 3 Reasons Why

Core Viewpoint - Investors are increasingly seeking growth stocks, particularly in the financial sector, to achieve above-average returns, but identifying such stocks involves significant risk and volatility [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score system aids in identifying promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - MasterCard (MA) is currently highlighted as a recommended growth stock, possessing a favorable Growth Score and a top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is a critical factor for growth investors, with double-digit growth being particularly attractive [3] - MasterCard's historical EPS growth rate stands at 21.5%, with a projected EPS growth of 11.6% for the current year, surpassing the industry average of 11.3% [4] Group 3: Asset Utilization - The asset utilization ratio, or sales-to-total-assets (S/TA) ratio, is an important metric for assessing efficiency in generating sales [5] - MasterCard's S/TA ratio is 0.62, indicating that the company generates $0.62 in sales for every dollar in assets, compared to the industry average of 0.41 [5] Group 4: Sales Growth - Sales growth is another key indicator, with MasterCard expected to achieve a 15% sales growth this year, significantly higher than the industry average of 4.8% [6] Group 5: Earnings Estimate Revisions - Positive trends in earnings estimate revisions correlate strongly with stock price movements [7] - MasterCard's current-year earnings estimates have been revised upward, with the Zacks Consensus Estimate increasing by 1.9% over the past month [8] Group 6: Overall Positioning - MasterCard has achieved a Growth Score of B and a Zacks Rank of 2 due to positive earnings estimate revisions, positioning it well for potential outperformance [10]