Is Mastercard Stock a Smart Bet Ahead of Q4 Earnings? Key Estimates

Core Viewpoint - Mastercard is expected to report its fourth-quarter 2025 results on January 29, 2026, with earnings estimated at $4.20 per share and revenues of $8.74 billion [1] Financial Estimates - The fourth-quarter earnings estimate has seen one upward revision and two downward movements, indicating a 10% increase from the previous year [2] - For the full year 2025, the revenue estimate is $32.73 billion, reflecting a 16.2% year-over-year rise, while earnings per share are projected at $16.44, a 12.6% increase [3] Earnings Performance - Mastercard has a strong track record of exceeding earnings estimates, achieving an average surprise of 3.1% over the last four quarters [4] Earnings Predictions - The model predicts a likely earnings beat for Mastercard, supported by a positive Earnings ESP of +0.62% and a Zacks Rank of 3 [5] Growth Drivers - Gross Dollar Volume (GDV) is expected to rise by approximately 11%, with cross-border assessments increasing by 18.1% [8] - Domestic GDV is projected to grow by 8% year-over-year, while European operations are expected to see a 17.1% increase [9] - Switched transactions are anticipated to rise by 9.4%, driven by strong consumer spending and increased contactless payment acceptance [10] - Cross-border travel is expected to positively impact cross-border volumes, with domestic assessments and transaction processing assessments projected to increase by 11.9% and 14.3%, respectively [11] - Value-added Services and Solutions net revenues are estimated to grow by 23.1% year-over-year, driven by demand for consulting and marketing services [12] Expense Outlook - Adjusted operating expenses are expected to rise nearly 19% year-over-year, with rebates and incentives projected to increase by 21.6% [14] Market Performance - Over the past three months, Mastercard's stock declined by 6.8%, while Visa fell by 5.3%, and American Express gained 0.6%, all outperforming the industry's 8.8% decline [15] Valuation Analysis - Mastercard's current valuation is at 27.35X forward 12-month earnings, above the industry average of 19.43X, indicating a premium compared to peers like Visa and American Express [19] Operational Strength - Fundamentals remain solid with healthy transaction volume growth, rebounding cross-border activity, and expanding value-added services, reinforcing Mastercard's long-term growth narrative [22]