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Signal Ledger valuation · MA

Mastercard Inc

What the shares are worth today on our research (management’s own targets for each business): every line valued at the end of FY2030, net debt rolled forward, then discounted back to Jun 30, 2026.

Signal Ledger valuation$507.58−20% vs $633.21
Business value at FY2030
$536B
FY2030 revenue
$48B
FY2030 EPS · P/E
$27.53 · 25×
Discount rate (WACC · equity)
7.83% · 8.07%

Researched Oct 23, 2026 from SEC filing 0001141391-26-000083 · price $633.21 at research time · Valuation methodology

Latest quarter in this research: Q2 2026

Reported Jul 30, 2026 for the quarter to Jun 30, 2026 (company release ↗). This valuation already reflects these results (researched Oct 23, 2026).

Revenue$9.28B
Operating income$5.59B60.2% margin
Net income$4.39B
Diluted EPS$4.97
SegmentRevenuevs a year agoOperating incomeMargin
Payment Network$5.45B+10%——
Value-added services and solutions$3.83B+20%——
  • Latest released quarter as of October 22; subsequent October 27–29 results are not yet reported. Product/category profits left null when not separately disclosed.

What each business is worth

BusinessModelFY2030 revenueValue todayPer share2030 multipleValue from beyond FY2030
Payment networkMargin$23B$197B$224.3615.9× EBIT66%
Value-added services and solutionsMargin$25B$261B$297.9420.5× EBIT72%
Noncurrent quoted equity investmentsNote 5: marketable equity securities at June 30 0.143B in Other assets, marked to quoted public prices, separate from current cash/investments 11.609B. Investment gains are below EBIT. Nonmarketable securities 1.524B are not all fresh priced-round marks and are not blindly added.Market mark—$0.1B$0.16——
Businesses and holdings$48B$458B$522.46

From 2030 back to today

  1. Enterprise value at end of FY2030$536B
  2. Plus net cash at FY2030$66B
  3. Equity value at FY2030$602B
  4. ÷ (1 + 8.07%)^4.5 years at the cost of equity$424B
  5. + dividends paid on the way, discounted$11B
  6. + investments held outside the businesses$0.1B

This reconciliation checks the published Signal Ledger valuation against the net-debt path. The difference is 2.1%, inside our 5% tolerance.

From businesses to one share

  1. All businesses, valued today$458B
  2. − borrowings$25B
  3. − finance leases$0B
  4. + cash and short-term investments$12B
  5. + investments held outside the businesses$0.1B
  6. ÷ diluted shares0.876B
  7. Signal Ledger valuation$507.58

Year by year to FY2030

Fiscal yearRevenueEBITDACapexFree cash flowNet debt at year end
FY2026$37B$23B$1.4B$17B$6.1B
FY2027$40B$25B$1.5B$18B$9.1B cash
FY2028$42B$26B$1.6B$20B$26B cash
FY2029$45B$29B$1.7B$21B$45B cash
FY2030$48B$31B$1.8B$23B$66B cash

What must be true

  • Payment network grows revenue from $21.5B in FY2026 to $22.7B in FY2030 (1.1×).
  • Value-added services and solutions grows revenue from $15.9B in FY2026 to $24.9B in FY2030 (1.6×).
  • Payment network raises its EBIT margin from 57.6% to 60.9%.
  • Value-added services and solutions raises its EBIT margin from 57.6% to 61.6%.
  • The company spends $7.8B of capital expenditure through FY2030.
  • Net debt peaks at $13.0B in FY2025 and stays financeable.

What the price implies

To reach $633.21 at our discount rate, Mastercard Inc would need about $60B of FY2030 sales (growth of about 12.5% a year from FY2026) with 61.3% GAAP EBIT margin — versus $47.6B and 61.3% GAAP EBIT margin in our research.

At the research price of $633.21 (2026-10-23), the price asks more than our assumptions overall. These are operating requirements at that price, not additional valuations or forecasts.

If sales and margins changed together

Each row matches the same research price at our unchanged discount rate, by scaling every operating line's margin by one common factor. Sales cover margin and capacity lines only; other valuation lines stay fixed. Margins are revenue-weighted within each metric, before separately modeled corporate costs and eliminations. The conclusion uses the row at our research margins when sales alone can match the price, otherwise the solved row needing the least sales growth; this is a trade-off between growth and profitability, not a forecast.

FY2030 sales factorFY2030 salesFY2026–30 CAGRRequired FY2030 marginRequirement
1.26×At research margins$60B12.5%
61.3% GAAP EBIT
Within margin guardrails
1.50×$71.4B17.6%
52.0% GAAP EBIT
Within margin guardrails
2.00×$95.2B26.3%
39.6% GAAP EBIT
Within margin guardrails
3.00×$142.9B39.8%
26.8% GAAP EBIT
Within margin guardrails

CAGR uses $37.4B of same-scope FY2026 sales from the published model or its sourced research base, over four fiscal years. “Within margin guardrails” checks numeric limits only, not commercial plausibility. Each line and year must stay at or below 50.0% GAAP EBIT and 100% EBITDA, or our research margin where that is higher; capacity EBIT uses the engine's equipment depreciation. Unsolved margins are not extrapolated.

Implied discount rate
6.9%

The WACC that makes model value equal the price, shifting WACC and cost of equity by the same amount. Model: 7.8% WACC · 8.1% cost of equity.

All-business FY2030 sales factor
1.26×

FY2030 revenue would need to reach $60B (model: $47.6B) across the margin and capacity businesses. FY1 stays fixed; the sales change ramps to FY2030 and stays at that factor thereafter.

If only one business changed

Businesses with margin or capacity revenue paths, ordered by value today. Revenue and margin are separate alternatives; these requirements are not added together.

Value-added services and solutions

Revenue alone
FY2030 revenue would need to reach $35.5B (model: $24.9B).
Margin alone

FY2030 EBIT margin would need to reach 87.5% (model: 61.6%).

Payment network

Revenue alone
FY2030 revenue would need to reach $35.8B (model: $22.7B).
Margin alone

FY2030 EBIT margin would need to reach 94.8% (model: 60.9%).

Mechanical requirements, not forecasts. The separate sales-only and single-business factors are searched from 0.1× to 6×; an unsolved comparison means this business alone cannot get there within those bounds. Single-business revenue changes apply from FY2 onward; margin changes scale the full EBIT or EBITDA margin path. Mixed groups show revenue-weighted EBIT and EBITDA margins separately. Requirements above 100% are not feasible margins. Joint rows instead search non-negative uniform margin factors only up to the EBIT/EBITDA guardrails; the entire margin path scales, including post-FY2030 convergence. Sales and margins change together only in that table. The rate search runs from the largest terminal growth rate plus 0.5 percentage points to 30% WACC.

The discount rate

Cost of equity
8.07%

r_f 3.87% (5-year average 10-year Treasury yield 3.87% (spot 5.13% on 2026-10-21)) + β 0.84 after Blume adjustment × 5%, rounded to 0.01% (1bp)

WACC
7.83%

methodology §4.5: market-weighted WACC, not rounded

10-year Treasury · model / spot
3.87% · 5.13%

The model uses the recorded 5-year average Treasury yield. The spot yield is shown for context.

Every input, with its source

Show 19 inputs · reported, guidance and rule-based
InputValueBasisWhy
Revenue FY2026Payment network$21.5BReportedtarget (methodology §4.2), growth 10.2% investor.mastercard.com ↗
Revenue FY2030Payment network$22.7BGuidancehold moderate (methodology §4.2), growth 1.4% investor.mastercard.com ↗
EBIT margin FY2030Payment network60.9%Rulelinear path to 60.9% by FY2030 (§4.3 E2: 3.2601 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 3.1% to FY2030; no cited expansion evidence) investor.mastercard.com ↗ · sec.gov ↗
Maintenance capexPayment network3.7%ReportedCash capex includes $489M property/equipment AND $726M capitalized software; evidence capex alone misses software. Proportional allocation and ratio held; 3.71% is below capacity threshold. sec.gov ↗
Terminal growthPayment network3.0%Rulemethodology §4.2 terminal growth for a growth line Valuation methodology §4.2 · Read methodology ↗
Revenue FY2026Value-added services and solutions$15.9BRuletarget (methodology §4.2), growth 19.5% investor.mastercard.com ↗
Revenue FY2030Value-added services and solutions$24.9BGuidancehold moderate (methodology §4.2), growth 11.8% investor.mastercard.com ↗
EBIT margin FY2030Value-added services and solutions61.6%Rulelinear path to 61.6% by FY2030 (§4.3 E2: 4.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 13.3% to FY2030; no cited expansion evidence) investor.mastercard.com ↗ · sec.gov ↗
Maintenance capexValue-added services and solutions3.7%ReportedCash capex includes $489M property/equipment AND $726M capitalized software; evidence capex alone misses software. Proportional allocation and ratio held; 3.71% is below capacity threshold. sec.gov ↗
Terminal growthValue-added services and solutions3.0%Rulemethodology §4.2 terminal growth for a growth line Valuation methodology §4.2 · Read methodology ↗
WACCDiscount rates7.83%Rulemethodology §4.5: market-weighted WACC, not rounded FRED DGS10 2021-10-20..2026-10-21
Cost of equityDiscount rates8.07%Ruler_f 3.87% (5-year average 10-year Treasury yield 3.87% (spot 5.13% on 2026-10-21)) + β 0.84 after Blume adjustment × 5%, rounded to 0.01% (1bp) 60 monthly returns vs SPY, 2021-09..2026-09 (adjusted closes)
Tax rateDiscount rates21.0%GuidanceManagement three-year 2025-2027 performance objectives assume ~21% tax rate; current-quarter discrete benefits are not extended forever. investor.mastercard.com ↗
Cash and short-term investmentsBalance sheet$11.6BReportedcash, cash equivalents and short-term investments us-gaap:CashAndCashEquivalentsAtCarryingValue + us-gaap:Investments (classified current by filing calculation linkbase) · 0001141391-26-000083 (filed 2026-07-30)
BorrowingsBalance sheet$24.6BReportedborrowings due within a year plus long-term borrowings us-gaap:LongTermDebtCurrent · 0001141391-26-000083 + us-gaap:LongTermDebtNoncurrent · 0001141391-26-000083
Finance leasesBalance sheet$0.0BReportedno finance lease liability reported balance sheet 2026-06-30
SharesBalance sheet0.876BReportedshares outstanding as of 2026-07-27 cover page of 10-Q 0001141391-26-000083 (2 share classes summed)
Noncurrent quoted equity investmentsNon-operating assets$0.1BReportedNote 5: marketable equity securities at June 30 0.143B in Other assets, marked to quoted public prices, separate from current cash/investments 11.609B. Investment gains are below EBIT. Nonmarketable securities 1.524B are not all fresh priced-round marks and are not blindly added. sec.gov ↗
Dividends per yearShareholders$2.9BReportedTrailing four paid quarters through latest reported quarter June 2026: August/November 2025 $0.76 each plus February/May 2026 $0.87 each = $3.26. Evidence FY2025 declared $3.15 mixes declaration timing. × 0.876B shares investor.mastercard.com ↗

Research notes

  • share-count comparison: 0.883B quarter 2026-04-01..2026-06-30 · 0001141391-26-000083; point-in-time denominator retained
  • cost of equity 8.07% (β 0.84 after Blume adjustment), WACC 7.8%

Signal Ledger research under one stated scenario — management's targets are delivered — not a forecast that they will be and not investment advice. The research desk (GPT-6.1 (Codex)) gathers filings, guidance and targets; deterministic code applies the samepublished rules to every company and checks the result. Inputs may contain errors; follow the source links before relying on them. Read our valuation methodology →