MasterCard share price hits new high on back of positive guidance
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MasterCard share price hits new high on back of positive guidance

MasterCard’s share price jumped to a record high last Thursday, as the company lifted its full-year sales outlook. During an investor presentation, the company said that it expected net revenue growth in the “high end of low-double-digits” for 2017 – an upgrade from its earlier stated expectations of “low double-digit” growth. 

MasterCard’s share price has appreciated by 35% so far this year

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SOURCE: Yahoo Finance

MasterCard also pointed to a bright future, saying that its “total addressable market” is “about four times” as large as many investors think. This means that the company sees its revenue opportunity as far greater than generally accepted. Key to this opportunity is getting payment methods in the hands of card-less consumers. MasterCard’s executives claim that there are a billion consumers that do not have cards associated with their bank accounts, and that many business customers are in the same position. The company hopes use last year’s UK acquisition VocaLink to help close that gap.

A press release announcing the acquisition in July 2016 described VocaLink as offering “innovative products with global potential, including ZAPP, a mobile payments app that leverages Fast ACH technology, and licenses its software and provides services to support ACH activities in Sweden, Singapore, Thailand and the Unites States.”

The company’s CEO Ajay Banga said at the time: “VocaLink is a unique company with outstanding technology, assets and people. We look forward to investing in and maximizing the technology, and embedding it in our products and solutions, both in the UK and around the world.”

Disclosure

Dominion holds MasterCard in its Global Trends Ecommerce Fund.


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