Key Points
Mastercard shares have touched all-time highs throughout 2025.
The company generates incredible profits thanks to its very lucrative platform.
It's probably best to wait for a pullback before buying the stock.
Along with Visa, Mastercard (NYSE: MA) dominates the market for processing debit and credit card transactions. It's a payments giant that has generated some serious wealth. Shares have climbed an impressive 12,260% since the company's initial public offering in 2006 (as of Sept. 30).
Mastercard shares might be trading 5% off their peak, but they have been hitting new all-time highs in 2025. Wall Street is clearly bullish on this fintech stock. Here's one obvious reason that's probably the case.
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Show me the money
One clear sign of a wonderful company is huge profits. Mastercard doesn't disappoint in this regard. This is one of the most lucrative businesses on the planet. In the past decade, Mastercard has registered an average net profit margin of 42.1%.
Thanks to steady revenue growth, net income has climbed at a wonderful pace. Between Q2 2015 through the second quarter of this year, diluted earnings per share have increased at a compound annual rate of 17.5%. This is a truly exceptional track record of bottom-line performance.
Lucrative business model
The credit goes to the company's business model, which requires low capital expenditures and scales up well. Mastercard makes money anytime transactions run across its payment network. Besides not lending its own capital, the best part is that the technological infrastructure is already built out.
Don't rush to buy the stock just yet. At a price-to-earnings ratio of 38.1, the valuation is steep.
Should you invest $1,000 in Mastercard right now?
Before you buy stock in Mastercard, consider this:
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Mastercard and Visa. The Motley Fool has a disclosure policy.
