Pacific Crest Says Mastercard Has 'Rock-Solid Fundamentals'

MasterCard Incorporated MA reported a top and bottom line beat in its second quarter print on Thursday, prompting Pacific Crest's Josh Beck to describe the company's fundamentals as being "rock-solid."

Beck highlighted MasterCard's second quarter as being "clean all around" with a reported transaction revenue growth of 21 percent year-over-year to $1.27 billion. The figure also came ahead of the $1.20 billion analysts were looking for and the beat was driven by processed transaction and fee growth of 14 percent and 6 percent, respectively.

Domestic assessments rose 8 percent year-over-year to $1.11 billion and cross-border volume rose 14 percent in constant currency.

Net revenue of $2.69 billion was ahead of the Street's $2.59 billion estimate while the company's earnings per share of $0.96 marked a six cent per share beat.

Beck also commented on MasterCard's acquisition of VocaLink and the "rationale" behind the move. Specifically, MasterCard will benefit from a larger presence in the U.K. payments ecosystem market, a network service expansion to include ACH processing, and a unique data set that can be used to expand its products and services.

Overall, the acquisition could "yield significant synergies."

Finally, Beck sees the potential for an extended relationship with Paypal Holdings Inc PYPL although details "remain unclear" at this time.