Is Mastercard Incorporated (MA) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $655.81, Mastercard Incorporated (MA) trades 54% above TickerWorth's blended fair value of $427.22 per share — a discounted-cash-flow model cross-checked against peer multiples and asset value — meaning the market currently prices MA overvalued vs our estimate of what the business is intrinsically worth. Our fair value sits below the market, an implied -34.9% move to close the gap if the business performs in line with our assumptions. This is an educational model, not a price target or a recommendation — the value moves with the inputs, which you can test yourself using the WACC slider below.
One of the lenses behind that blended figure is a discounted-cash-flow model, which on its own values MA at about $523.35 per share. The rest of this page walks through that DCF — its assumptions, reverse-DCF and discount-rate sensitivity — because it is the auditable anchor of the blend.
The valuation discounts Mastercard Incorporated's projected free cash flows at a weighted-average cost of capital (WACC) of 7.4%, with a long-run terminal growth rate of 2.5%. About 82% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — the market is implying roughly 15.1% annual revenue growth for MA. Our base case instead compounds to about 11.2% a year over the same forecast, so the market is pricing in materially faster growth than our base case. The reverse-DCF is a quick sanity check: it reframes 'is this stock cheap?' as 'do I believe the growth the price requires?' rather than arguing over a single point estimate of fair value.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, MA's modeled DCF value ranges from about $348.58 to $1,058 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Mastercard Incorporated would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of MA's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind MA's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $32,791,000,000 | FY2025 Form 10-K (filed 2026-02-11) — Consolidated Statements of Operations and revenue disaggregation note (Note 3): Net revenue $32,791M, as filed, by category: payment network $19,476M + value-added services and solutions $13,315M = $32,791M. The payment-network line is NET of rebates and incentives of $20,522M recorded as contra-revenue, exactly as filed: gross assessments of $39,998M (domestic $11,029M + cross-border $12,021M + transaction processing $15,930M + other network $1,018M) less the $20,522M of rebates and incentives = $19,476M — the components foot to the filed net line, and the Q3 2026 10-Q's disaggregation presentation is consistent with this split (its nine-month FY2026 components each sit below these FY2025 full-year counterparts). Growth into the base year: +16.4% on FY2024's $28,167M and +12.2% the year before that (FY2023: $25,098M, computed off the 10-K's comparative columns) — FY2025 is the fastest filed year of the three, flattered by currency, which is why the forecast fade below starts underneath it. |
| Base EBIT margin | 57.6% | FY2025 Form 10-K (filed 2026-02-11) — Consolidated Statements of Operations: Operating income $18,897M / net revenue $32,791M = 57.63%. The filed path: 55.8% (FY2023: $14,008M on $25,098M), 55.3% (FY2024: $15,582M on $28,167M), 57.6% (FY2025). Every one of those years carries a litigation provision — $539M, $680M and $504M respectively — and excluding that one line the margins are 58.0%, 57.7% and 59.2%: the provision is a recurring feature of this business, lumpy in size, and Mastercard itself excludes it in its non-GAAP reconciliation — the forecast path below carries a normalized provision load rather than either extreme. The base-year margin is the disclosed anchor only; the forecast starts from the built FY2026 year, not from 57.63%. |
| Forecast revenue growth | 14% → 12% → 11% → 10% → 9% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | FRED DGS10 — 10-year US Treasury constant maturity yield: Shared house input: the same 5.24% used by every researched model in this tracker (most recently V, 2026-10-26), held so values stay comparable across companies. The current FRED print is lower (4.96% on 2026-10-22); refreshing this one input at the next tracker-wide update would raise this value to about $555.31 — it is not refreshed for one company alone. |
| Beta | 0.47 | Assumption — Own regressions of MA on the S&P 500 (VOO as the index proxy) from Finnhub daily/weekly/monthly price history (delayed): Measured here against the S&P 500 (VOO proxy) from Finnhub price history: 0.79 (5Y monthly), 0.43 (3Y monthly), 0.76 (2Y weekly), 0.47 (1Y weekly), 0.28 (1Y daily — the daily series reaches back one year, so this is the daily window that exists; daily returns correlate only ~0.16 in that window because Mastercard ground steadily upward through a choppy tape, and resampling the same daily closes to weekly prints 0.48, in line with the measured weekly window). The value used, 0.47, is the median of the five windows — the same method the V and NBIS models document, unchanged by the Q3 2026 refresh (beta is measured from price history, not from earnings). The published cross-check (Finnhub prints 0.80) matches the 5Y monthly window almost exactly: it is built on the longest window, which still contains the 2021–22 rate shock, when Mastercard's shares de-rated with every long-duration asset. Every shorter window describes a lower-beta company, and all five describe the same one — a toll-booth whose volumes track nominal spending, not the cycle. No Blume shrink is applied in either direction. This input matters more here than in most models in this tracker: at the published-style 0.80 the value is $388.62, at the kindest longer window (2Y weekly, 0.76) it is $401.35, at the kindest window of all (1Y daily, 0.28) it is $649.19 — above the price — and the price itself implies a beta of about 0.33, below every window except that daily one. Each 0.1 of beta near the value used is worth roughly $49 a share. |
| Terminal growth | 2.5% | Assumption — House default — long-run nominal growth ceiling applied across the tracker: Shared house input (2.5%), identical in every researched model in this tracker. |
| Diluted shares | 873M | Q3 2026 Form 10-Q (filed 2026-10-29) — Note 10, Stockholders' Equity (share counts at 2026-09-30) and cover (exact counts at 2026-10-26): Shares outstanding at 2026-09-30, per the 10-Q's equity note (in millions, as printed): Class A common stock 866M plus Class B common stock 7M = 873M, used here. Class B converts into Class A on a one-for-one basis (an equal number of shares, per the certificate of incorporation), so — unlike Visa, where the classes convert at premium rates and the census is the model's central judgement — Mastercard's as-converted total is simply every outstanding share counted once, and the market price is for the Class A share those shares become. The cover of the same filing prints the exact register at 2026-10-26 — Class A 865,505,416 and Class B 6,510,825 = 872,016,241 — after a further 1.1M shares were repurchased quarter-to-date through 2026-10-26 for $0.6B, which puts the 2026-09-30 census at ~873.1M and confirms the note's rounded 873M; on the cover register the slice prints $523.94. The 2026-09-30 census is used because it pairs with the 2026-09-30 balance sheet this model bridges from. The weighted-average diluted count Mastercard reports for EPS (884M for the nine months, which averages nine months of buybacks and adds dilutive plan equivalents) would print $516.83. Buybacks retired $11,893M of stock in the nine months of FY2026 ($3.0B in Q3, 5.3M shares), taking the census from 893.9M at FY2025 year-end through 877.2M at 2026-06-30 to 873.0M here; $4.9B remained under the repurchase program at 2026-10-26. |
| Market price | $655.81 | Delayed quote · as of 2026-11-10 04:59 UTC |
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