MA
Mastercard Incorporated
$551.54
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Fair Value
Trading 24.0% below fair value
You pay
$551.54
Bear
$409.22
Fair
$725.69
Bull
$1,111.48
Bear
$409.22
-25.8%
11% stage 1 growth, 11% discount
Fair
$725.69
+31.6%
19% stage 1 growth, 11% discount
Bull
$1,111.48
+101.5%
24% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
45%
Implied Market Multiple
30.1x
Market is pricing in (growth)
14.4%
vs 18.7% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $651.75 from 64 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $725.69 per share.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions