Mastercard stock is expensive, but Q4 earnings still warrant a buy

Mastercard (NYSE: MA) remains in focus on Thursday after reporting a market-beating Q4, which Mizuho’s senior analyst Dan Dolev called an “upbeat start” to the year in a research report on Jan. 29.

According to Dolev, the credit card firm’s guidance for low-double-digit growth in full-year sales, marginally above the 12% consensus, serves to “defy fears of slowing consumer spend.”

Dolev agreed that MA faces looming regulatory scrutiny over interchange fees and rising incentive costs, which make its premium valuation (27x forward earnings) appear vulnerable to compression

Still, he recommended sticking with Mastercard stock – arguing the firm’s operational momentum and early January spending data justify the expensive price tag.

Beyond headline numbers: why Mastercard stock remains attractive

Dolev’s bullish thesis is anchored in Mastercard’s transition from a pure-play transaction processor to a high-margin services powerhouse.

In Q4, while core transaction revenue remained steady, the “Value-Added Services and Solutions” segment soared about 26%.

Dolev views this as a critical “quality beat” because these services – ranging from AI-driven fraud protection to sophisticated data analytics – are less sensitive to interest rate fluctuations and offer significantly higher margins than traditional swipe fees.

By diversifying its revenue stream away from pure volume, Mastercard has built a “fortress-like” business model.

According to the Mizuho analyst, this shift ensures that even if transaction growth plateaus, the company’s bottom-line expansion remains robust and protected, keeping MA stock attractive as a long-term holding.

Buy MA shares as the fintech continues to defy macro blues

Another pillar of Mizuho’s bull case is the sheer resilience of the consumer, which has consistently outperformed bearish expectations.

Dolev pointed to a crucial data point from the earnings call: Mastercard’s switched volume growth held firm at 9% through the first three weeks of January 2026.

This “real-time” look at the consumer suggests the feared post-holiday spending cliff has failed to materialize, offering a high degree of visibility for MA’s upbeat full-year guidance.

By demonstrating that “macro environment remains supportive”, Mastercard has neutralized the argument that its premium multiple is a trap, proving instead that it’s well-deserved.

Note that Mastercard shares currently pay a 0.67% dividend yield as well, which makes them even more exciting to own for the long-term.

Mastercard is expanding footprint in AI

Finally, MA shares are worth owning for the company’s recent launch of “Agent Pay” – an artificial intelligence (AI) driven commerce suite – which positions Mastercard at the forefront of “Agentic Economy”, where AI agents handle autonomous transactions.

This means Mastercard isn’t just a payment network anymore; it’s evolved into a rather essential AI-security layer for global commerce, making its expensive valuation look like a bargain for long-term investors.

That’s why Wall Street’s mean target on MA stock sits at $664 at the time of writing – indicating potential upside of another 25% from here.

The post Mastercard stock is expensive, but Q4 earnings still warrant a buy appeared first on Invezz