QS Research · Michael Burry's Scion Capital analyst template · 2006
Mastercard Inc (MA)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: PASS
Conviction medium · base case -6% · downside -29% · upside +6%
Mastercard is a high-quality, asset-light payments network: TTM revenue is $36.29B (N8), EBIT $21.27B (N9), net income $16.96B (N11) and FCF $16.08B (N14), with Q3 2026 revenue +14% and adjusted EPS +21% (S98). The apparent 4.7x P/E and $80.41B market cap are not usable because they rest on 122.53M shares from a 2010 filing (N5, N6); against 877.78M Class A shares disclosed at Apr 21 2026 (S30), the $656.25 price (N1) is about 34x TTM EPS of $19.32 ($16.96B/877.78M). At 32x TTM earnings the value is $618 (-5.8%), at 24x it is $464 (-29.3%), and at 36x it is $696 (+6.0%). That is a full price for a good business, not a deep-value long, and the short rule is not met, so I pass.
Key numbers
- Share price: $656.25
- Market cap: $80.41B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $36.29B
- EV / EBITDA (TTM): 4.2x
- P/E (TTM): 4.7x
- Price / book: 11.91x
The 15 boxes
- ✓ 1. Long-form business notes
Mastercard is a payments-network and technology company that earns assessments on gross dollar volume, transaction-switching fees and fees from services and other payment-related solutions; it does not issue cards or extend credit. FY2025 net revenue was $32.8B, up 16%, with net income of $15.0B, up 16%, and operating cash flow of $17.65B. Between the FY2020 and FY2025 10-Ks, revenue rose from $15.30B to $32.79B while the strategy shifted toward three priorities: consumer payments, commercial and new payment flows, and services and other solutions. The network also increased its switched-transaction share from over 55% in FY2020 to more than 70% in FY2025.
- ✓ 2. Competitive advantage
The sources do not establish a durable moat for Mastercard; they describe a highly competitive global payments industry with general-purpose networks, local/debit networks, ACH, wallets, fintechs, government-backed systems and digital currencies. What they do support is scale and cash generation: FY2025 revenue was $32.79B, operating income $18.90B, operating cash flow $17.65B and capex only $489M. But the 10-K repeatedly flags resource-rich competitors, three-party systems, fintech cost advantages, disintermediation and regulatory burdens, so the advantage is not proven durable from these sources.
- ✓ 3. 10-Q takeaways
Q3 2026 net revenue was $9,807 million versus $8,602 million in Q3 2025, with operating income of $5,862 million versus $5,061 million. Net income was $4,628 million and diluted EPS $5.28; nine-month 2026 operating cash flow was $11,859 million. The quarter included $2,976 million of treasury purchases, a $1.4 billion BVNK acquisition, and $5.000 billion of June 2026 note issuance; the sources give no full-year guidance or same-store/comparable sales.
- ✓ 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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