Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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Current Valuation Ratios
Mastercard Inc., current price multiples
| Mastercard Inc. | Accenture PLC | Adobe Inc. | Cadence Design Systems Inc. | CrowdStrike Holdings Inc. | Fair Isaac Corp. | International Business Machines Corp. | Intuit Inc. | Microsoft Corp. | Oracle Corp. | Palantir Technologies Inc. | Palo Alto Networks Inc. | Salesforce Inc. | ServiceNow Inc. | Synopsys Inc. | Workday Inc. | Software & Services | Information Technology | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||
| Current share price (P) | |||||||||||||||||||||
| No. shares of common stock outstanding | |||||||||||||||||||||
| Growth rate (g) | |||||||||||||||||||||
| Earnings per share (EPS) | |||||||||||||||||||||
| Next year expected EPS | |||||||||||||||||||||
| Operating profit per share | |||||||||||||||||||||
| Sales per share | |||||||||||||||||||||
| Book value per share (BVPS) | |||||||||||||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||||||||||||
| Price to earnings (P/E) | |||||||||||||||||||||
| Price to next year expected earnings | |||||||||||||||||||||
| Price-earnings-growth (PEG) | |||||||||||||||||||||
| Price to operating profit (P/OP) | |||||||||||||||||||||
| Price to sales (P/S) | |||||||||||||||||||||
| Price to book value (P/BV) | |||||||||||||||||||||
Based on: 10-K (reporting date: 2022-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Mastercard Inc., historical price multiples
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The financial ratios over the five-year period display noteworthy trends that reflect changes in market valuation relative to earnings, operating profit, sales, and book value.
- Price to Earnings (P/E) Ratio
- This ratio exhibits an overall decline after peaking in 2020. Starting at 38.62 in 2018, it increased to 52.84 in 2020, suggesting heightened market expectations or growth prospects during that year. Subsequently, it decreased steadily to 35.51 by the end of 2022, indicating a moderation in the price investors were willing to pay for each dollar of earnings.
- Price to Operating Profit (P/OP) Ratio
- The P/OP ratio follows a similar pattern to the P/E ratio, with a rise from 31.07 in 2018 to 41.92 in 2020, followed by a decline to 28.76 in 2022. This trend suggests that the market’s valuation relative to operating profit expanded notably until 2020 and then contracted, reflecting changes in either operating profitability or investor sentiment.
- Price to Sales (P/S) Ratio
- The P/S ratio increased from 15.13 in 2018 to 22.14 in 2020, marking a peak in valuation against sales. The ratio then gradually reduced to 15.86 in 2022, implying a return to valuation levels close to those of 2018 after a period of premium valuation. This could indicate that revenue growth or sales expectations stabilized or that the market recalibrated its outlook.
- Price to Book Value (P/BV) Ratio
- The P/BV ratio shows an upward trend with some fluctuations. It started at 41.94 in 2018, peaked at 58.15 in 2019, declined slightly over the next two years but rose again to 56 in 2022. This suggests increased market valuation relative to book value, potentially reflecting growing shareholder equity value or intangible assets valued by investors, maintaining a relatively high level through the period.
In summary, the valuation multiples for earnings, operating profits, and sales all peaked around 2020, followed by a downward adjustment towards 2022, possibly indicating a shift in market expectations or earnings performance normalization. Conversely, the price to book value ratio remained elevated, highlighting sustained market confidence in the company’s net asset base or intangible value despite fluctuations in other valuation metrics.
Price to Earnings (P/E)
Mastercard Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net income (in millions) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/E Ratio, Sector | ||||||
| Software & Services | ||||||
| P/E Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Mastercard Inc. Annual Report.
4 2022 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
The analyzed financial data reveals several notable trends over the five-year period ending on December 31, 2022. The share price displayed a generally upward trajectory, increasing substantially from $220.54 in 2018 to $369.96 in 2022. This represents a considerable appreciation in market value, with the most significant rise occurring between 2018 and 2019.
Earnings per share (EPS) exhibited a pattern of fluctuating growth. Starting at $5.71 in 2018, EPS rose to $8.08 in 2019 but declined to $6.45 in 2020. From 2020 onwards, EPS resumed its growth trend, reaching $8.89 in 2021 and further rising to $10.42 in 2022, indicating an overall improvement in profitability per share especially in the last two years.
The price-to-earnings (P/E) ratio showed variability that suggests changing investor sentiment and valuation multiples. Beginning at 38.62 in 2018, the ratio peaked at 52.84 in 2020, reflecting a potentially heightened market optimism or overvaluation during that year, notably despite the drop in EPS. Subsequently, the P/E ratio declined to 41.61 in 2021 and further to 35.51 in 2022, which may indicate a normalization of valuation levels relative to earnings or a more cautious market outlook as earnings improved.
Overall, the data indicates increasing shareholder value through higher share prices and improving earnings per share towards the end of the period. The fluctuations in the P/E ratio correspond with changes in earnings and market perceptions, highlighting periods of reevaluation by investors. The strong EPS growth in the last two years coupled with a declining P/E ratio suggests a solidifying profitability base with possibly more attractive valuation levels for investors at the conclusion of the period.
Price to Operating Profit (P/OP)
Mastercard Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Operating income (in millions) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/OP Ratio, Sector | ||||||
| Software & Services | ||||||
| P/OP Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Mastercard Inc. Annual Report.
4 2022 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited an overall upward trend from 2018 to 2022. It increased significantly from 220.54 USD at the end of 2018 to 369.77 USD in 2021, maintaining a similar level at 369.96 USD in 2022. Notably, the most substantial growth occurred between 2018 and 2019, with a more gradual increase in subsequent years.
- Operating Profit per Share
- Operating profit per share showed a generally positive trajectory across the five-year period. Starting at 7.1 USD in 2018, it increased to 9.61 USD in 2019 before experiencing a decline to 8.13 USD in 2020. The figure rebounded in the following years, reaching 10.31 USD in 2021 and rising further to 12.87 USD by the end of 2022, indicating improved operational performance.
- Price to Operating Profit Ratio (P/OP)
- The price to operating profit ratio fluctuated throughout the period, reflecting changes in share price relative to operating profit per share. The ratio rose from 31.07 in 2018 to peak at 41.92 in 2020, coinciding with the drop in operating profit per share that year. Subsequently, the ratio declined to 35.85 in 2021 and continued decreasing to 28.76 in 2022, suggesting an improved valuation relative to operating profitability.
Price to Sales (P/S)
Mastercard Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net revenue (in millions) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/S Ratio, Sector | ||||||
| Software & Services | ||||||
| P/S Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
Sales per share = Net revenue ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Mastercard Inc. Annual Report.
4 2022 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price showed a significant increase from $220.54 at the end of 2018 to $340.95 in 2019. It remained relatively stable in 2020 at approximately $341 before rising further to $369.77 in 2021. The price showed marginal change in 2022, ending at $369.96. Overall, the share price exhibits a strong growth trend over the five-year period, with the most pronounced increase occurring between 2018 and 2019.
- Sales Per Share
- Sales per share followed an upward trajectory over the period. Starting at $14.57 in 2018, there was a consistent increase to $16.80 in 2019, albeit with a slight decline in 2020 to $15.40. Subsequently, sales per share increased substantially to $19.32 in 2021 and further to $23.33 in 2022. This indicates strengthening revenue generation on a per-share basis, particularly notable in the last two years.
- Price-to-Sales (P/S) Ratio
- The P/S ratio experienced initial growth from 15.13 in 2018 to a peak of 22.14 in 2020, reflecting an increase in share price relative to sales per share. Following this peak, the ratio declined to 19.14 in 2021 and further to 15.86 in 2022. This decreasing trend in the last two years suggests the share price growth rate slowed relative to the sales increase, potentially indicating an adjustment to more balanced market valuations or improved sales performance outpacing stock price appreciation.
Price to Book Value (P/BV)
Mastercard Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Total Mastercard Incorporated stockholders’ equity (in millions) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/BV Ratio, Sector | ||||||
| Software & Services | ||||||
| P/BV Ratio, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Data adjusted for splits and stock dividends.
2 2022 Calculation
BVPS = Total Mastercard Incorporated stockholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Mastercard Inc. Annual Report.
4 2022 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited a significant increase from $220.54 at the end of 2018 to $369.96 by the end of 2022. Notably, the price saw a sharp rise from 2018 to 2019, followed by a steady upward trend with minor stabilization occurring between 2021 and 2022.
- Book Value Per Share (BVPS)
- The book value per share showed a consistent upward trajectory from $5.26 in 2018 to a peak of $7.48 in 2021 before declining to $6.61 in 2022. This suggests a general increase in net asset value per share over the period, although the decrease in the final year may indicate some asset value adjustments or increased liabilities.
- Price-to-Book Value (P/BV) Ratio
- The P/BV ratio started at 41.94 in 2018 and rose to a high of 58.15 in 2019, then experienced fluctuations, including a decline to 49.43 in 2021 followed by a rise again to 56 in 2022. This ratio reflects market valuation relative to book value, indicating that market prices remained elevated compared to stockholders' equity despite the slight decrease in BVPS in 2022.
- Overall Trends and Insights
- Over the five-year period, the share price demonstrated strong growth with a notable early jump and continued appreciation, while book value per share generally increased until 2021 but declined in 2022. The high and fluctuating P/BV ratio suggests that the market consistently valued the company at a significant premium over its book value. The decline in BVPS combined with a high P/B ratio in 2022 could imply growing market optimism or expectations not fully aligned with the company's underlying net asset value at that time.