QS Research · Michael Burry's Scion Capital analyst template · 2006
Mastercard Inc (MA)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: PASS
Conviction medium · base case none · downside -20% · upside +10%
The market is not missing much: Q3 2026 showed $9.807B revenue +14%, a 59.8% operating margin and $5.31 adjusted EPS +21%, with services +19% (S29, S31, S5), but at $652.70 (N1) the stock is about 26.9x TTM EBITDA and ~34.9x TTM net income, roughly Visa's multiple (S1). I use section 13's TTM to Sep 30, 2026 base and corrected 906.0M share count (N11, N12, N21, S2), not the stale 122.53M share count. Keeping today's 26.9x multiple, because no cited non-valuation catalyst justifies a rerating, TTM EBITDA of $22.50B gives a base value near $653; a 20% EBITDA decline gives ~$519 (-20.5%) and 10% growth gives ~$720 (+10.3%). The risk/reward is balanced-to-unfavourable and there is no margin of safety at a Visa-like multiple on a high-quality but mature network. I pass.
Key numbers
- Share price: $652.70
- Market cap: $79.98B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $36.29B
- EV / EBITDA (TTM): 4.2x
- P/E (TTM): 4.7x
- Price / book: 11.84x
The 15 boxes
- ✓ 1. Long-form business notes
Mastercard runs a four-party payments network and earns assessments on customers' GDV, transaction-switching fees, and other payment-related products/services; it does not issue cards or extend credit. FY2020 revenue was $15.30B, down 9%, and net income $6.41B, down 21%, with cross-border volume down 29%; FY2025 revenue was $32.79B, up 16%, and net income $14.97B, up 16%, with GDV $10.6T and switched transactions 175.5B. The FY2025 10-K frames priorities as consumer payments, commercial and new payment flows, and services, with 2025 disclosure of ~40% tokenized Mastercard transactions and Mastercard Move reach.
- ✓ 2. Competitive advantage
The sources show a consistently profitable, cash-generative payments network—FY2025 revenue $32.79B, operating income $18.90B, operating cash flow $17.65B—but the 10-K does not assert a durable brand or switching-cost moat. Instead it describes a highly competitive industry with larger traditional competitors, three-party systems, technology-based cost advantages and regulatory/licensing burdens; differentiation is stated as a condition, not a proven advantage.
- ✓ 3. 10-Q takeaways
Q3 2026 was a strong growth quarter: net revenue $9,807M (+14% as reported and currency-neutral), operating income $5,862M, operating margin 59.8% vs 58.8%, and diluted EPS $5.28 (adjusted $5.31) against $4.34. Growth came from both engines — payment network $5,749M (+11%) and value-added services and solutions $4,058M (+19%) — on GDV +7% local currency to $3.0 trillion, cross-border +11% and switched transactions +9%. Cash generation slipped year to date (operating cash flow $11,859M vs $12,646M) while buybacks and a $5.0 billion June 2026 debt issuance reshaped the balance sheet; the 10-Q and the same-quarter release give no numeric forward guidance.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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