MW Mastercard earnings set an upbeat tone for fintech stocks. These numbers stand out.

By Emily Bary

Among the highlights from Mastercard's report: A pickup in U.S. volumes and an encouraging outlook for the year

Mastercard Inc. showed a pickup in U.S. spending volumes during January, in an upbeat sign for the payments sector.

The company saw U.S. switched volumes increase by 10% in the first four weeks of January, compared with 8% growth seen in December. That trend "bodes well" for Mastercard $(MA)$, according to Mizuho analyst Dan Dolev. And it could be even better for Visa Inc. (V), which is far more exposed to the U.S. market.

Mastercard's stock is up 4% in morning trading Thursday, while Visa's is up 2%. Visa posts its own results after Thursday's close.

Shares of Block Inc. $(XYZ)$ and PayPal Holdings Inc. (PYPL) are up more than 2% each as well.

See also: How Visa and other fintech stocks can get a boost from AI

Overall switched volume was 13% in January, flat with December, though the company saw weakening trends in cross-border volumes.

"The labor market is strong, with low unemployment and continued wage growth," Chief Executive Michael Miebach said on the earnings call. "Inflation has moderated to varying degrees across categories and countries. Consumers remain engaged."

Mastercard offered guidance for the full year that calls for low-double-digit revenue growth on a GAAP basis. That was roughly in line with the consensus view of about 12%, according to Dolev, though he noted that analysts likely didn't have currency headwinds fully baked into their models.

In that sense, Mastercard's revenue forecast after currency adjustments seems like "a better yardstick and should be a positive catalyst," Dolev continued. With those adjustments, the company is calling for growth ranging from the "high end of low-double-digits" to the low teens.

"The fundamentals of our business remain strong, and we are well positioned for the opportunities ahead, driven by a diversified business model," Chief Financial Officer Sachin Mehra said on the earnings call.

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During 2024, Mastercard had over $11 billion in services and solutions revenue, but Miebach noted that this means the company only has less than 7% penetration of the $165 billion addressable market there, which he said presents an exciting opportunity.

-Emily Bary

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January 30, 2025 10:16 ET (15:16 GMT)

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