MA · Forward model · Bear case
The Bear case, 20 quarters out
Model as of
Each segment is projected from its own operating driver, rolled up into consolidated cash flow, and discounted back to a fair value per share. The assumptions below are editable — change them and every number on this page moves with them.
Mastercard reports ONE operating segment — Payment Solutions — and discloses TWO net-revenue categories inside it: Payment network and Value-added services and solutions. This model carries those two lines so VAS mix is visible. Every historical point is copied from the 8-K, 10-Q or earnings slides, or derived from two disclosures (Q3 2025 is the FY 10-K remainder after Q1, Q2 and Q4; Q4 2025 payment network is Q4 net revenue less disclosed VAS). Operating profit is not split, so the 61.1% adjusted operating margin is applied to both lines as an assumption. GDV and switched transactions are not a unit driver: assessments sit on volume, switching is a second count, and $6.0B of rebates are netted into the same line. Agent Pay and BVNK are named capabilities, not a third vertical. Calendar quarters; 2026 Q2 ended 30 June 2026. Segment 'EBITDA' here is the company adjusted operating margin. netCash is cash $11,291M less short-term debt $2,459M less long-term debt $22,184M. Capex 5% is H1 PPE plus capitalised software over H1 net revenue. Local profile price $484.09 and 893M shares are stale.
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Latest: $10.12B (2031Q2E)
| Period | Value |
|---|---|
| 2025Q1 | $7.25B |
| 2025Q2 | $8.13B |
| 2025Q3 | $8.60B |
| 2025Q4 | $8.81B |
| 2026Q1 | $8.40B |
| 2026Q2 | $9.28B |
| 2026Q3E | $9.40B |
| 2026Q4E | $9.51B |
| 2027Q1E | $9.60B |
| 2027Q2E | $9.68B |
| 2027Q3E | $9.75B |
| 2027Q4E | $9.81B |
| 2028Q1E | $9.86B |
| 2028Q2E | $9.91B |
| 2028Q3E | $9.95B |
| 2028Q4E | $9.98B |
| 2029Q1E | $10.01B |
| 2029Q2E | $10.03B |
| 2029Q3E | $10.05B |
| 2029Q4E | $10.07B |
| 2030Q1E | $10.08B |
| 2030Q2E | $10.09B |
| 2030Q3E | $10.10B |
| 2030Q4E | $10.11B |
| 2031Q1E | $10.11B |
| 2031Q2E | $10.12B |
Where each case comes from
High End case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the High End column is what happens if they are taken at face value.
Mastercard Q2 2026 earnings call, 30 July 2026
- Jul 30, 2026 As we look to the full year of 2026, we expect net revenue growth to be at the high end of low double-digit range on a currency-neutral basis, excluding inorganic activity.
- Jul 30, 2026 Although this is the same range we shared previously, we now expect to be higher within the range than our prior expectations, largely due to our stronger first half performance.
- Jul 30, 2026 We delivered above expectations with net revenue growth at 14% year-over-year, or 12% on a currency-neutral basis in the second quarter.
From cash flow to fair value
The published model, discounted at 11.0% a year with an exit multiple of 7.0x on revenue. The horizon and sliders above do not change this walk.
| Present value of free cash flow, 20 quarters | $64.79B |
| Terminal-year revenue | $40.44B |
| Terminal-year EBITDA | $23.36B |
| Exit multiple, on revenue | 7.0x |
| Terminal value | $283.05B |
| Discounted at 11.0% a year, terminal value becomes | $167.98B |
| Share of enterprise value from the terminal | 72% |
| Enterprise value | $232.77B |
| Net cash | −$13.35B |
| Equity value | $219.42B |
| Shares | 0.88B |
| Fair value per share | $248.49 |
| Against the deployed price of $551.47, as of | −55% |
10x terminal-year net revenue for a network whose VAS line has stopped compounding at 18% currency-neutral. Today the equity is ~$530B at $599.86 on 883M diluted shares, EV ~$543B after $13.4B of net debt, about 15.5x trailing sales of ~$35.1B and ~30x annualised adjusted $5.04. Visa is the other network and trades in the same neighbourhood. The exit is a de-rate, and deliberately. Discount rate is 9%, a quality-compounder cost of equity. Move the exit multiple before anything else: at 7x and at 14x the answer moves by more than a point of network growth. Rebates of $6.0B a quarter are already in the net-revenue base; they are not a separate haircut.
Read the other way round: at $551.47 the market is paying 18.1x terminal-year revenue, holding every other assumption on this page fixed. That is the number to argue about.
The projected path
The published model's 20 quarters. The horizon and sliders above do not change this table.
| Quarter | Payment Network | Value-Added Services | Revenue | YoY | EBITDA | Capex | FCF | R40 | PV of FCF |
|---|---|---|---|---|---|---|---|---|---|
| 2026 Q3E | $5.50B | $3.90B | $9.40B | +9% | $5.42B | $461M | $3.97B | +51 | $3.87B |
| 2026 Q4E | $5.55B | $3.96B | $9.51B | +8% | $5.48B | $457M | $4.02B | +50 | $3.82B |
| 2027 Q1E | $5.58B | $4.02B | $9.60B | +14% | $5.54B | $454M | $4.07B | +57 | $3.76B |
| 2027 Q2E | $5.61B | $4.07B | $9.68B | +4% | $5.58B | $451M | $4.11B | +47 | $3.70B |
| 2027 Q3E | $5.64B | $4.11B | $9.75B | +4% | $5.62B | $448M | $4.14B | +46 | $3.64B |
| 2027 Q4E | $5.66B | $4.15B | $9.81B | +3% | $5.66B | $445M | $4.17B | +46 | $3.57B |
| 2028 Q1E | $5.68B | $4.18B | $9.86B | +3% | $5.69B | $442M | $4.20B | +45 | $3.50B |
| 2028 Q2E | $5.70B | $4.21B | $9.91B | +2% | $5.72B | $439M | $4.22B | +45 | $3.43B |
| 2028 Q3E | $5.71B | $4.24B | $9.95B | +2% | $5.74B | $436M | $4.24B | +45 | $3.36B |
| 2028 Q4E | $5.72B | $4.26B | $9.98B | +2% | $5.76B | $434M | $4.26B | +44 | $3.28B |
| 2029 Q1E | $5.73B | $4.28B | $10.01B | +1% | $5.78B | $432M | $4.28B | +44 | $3.21B |
| 2029 Q2E | $5.74B | $4.29B | $10.03B | +1% | $5.79B | $430M | $4.29B | +44 | $3.14B |
| 2029 Q3E | $5.74B | $4.31B | $10.05B | +1% | $5.80B | $428M | $4.30B | +44 | $3.06B |
| 2029 Q4E | $5.75B | $4.32B | $10.07B | +1% | $5.81B | $426M | $4.31B | +44 | $2.99B |
| 2030 Q1E | $5.75B | $4.33B | $10.08B | +1% | $5.82B | $424M | $4.32B | +44 | $2.92B |
| 2030 Q2E | $5.75B | $4.34B | $10.09B | +1% | $5.83B | $422M | $4.33B | +43 | $2.85B |
| 2030 Q3E | $5.75B | $4.35B | $10.10B | 0% | $5.83B | $421M | $4.33B | +43 | $2.78B |
| 2030 Q4E | $5.76B | $4.35B | $10.11B | 0% | $5.84B | $419M | $4.34B | +43 | $2.71B |
| 2031 Q1E | $5.76B | $4.36B | $10.11B | 0% | $5.84B | $418M | $4.34B | +43 | $2.64B |
| 2031 Q2E | $5.76B | $4.36B | $10.12B | 0% | $5.85B | $417M | $4.34B | +43 | $2.58B |
Every row is projected. A year-over-year change is shown only where the quarter it compares against exists — an em dash means there is no comparable quarter, not a flat year.
Model revisions
Assumptions are marked to reality as each quarter prints. Every change is appended here, with the fair value the model produced at the time, so the model's own history stays visible.
| Date | Fair value then | Note |
|---|---|---|
| 2026-08-25 | $562.11 | Initial model. Two verticals on the disclosed payment-network / VAS split, basis the June quarter at $9,277M, Q3 calibrated to the low-double-digit floor of the CN guide; high end is the named case. |