Is the Market Underrating American Express's Growth Runway?

American Express shares have fallen 6% year-to-date, lagging Visa's 6% gain and Mastercard's flat performance, but second-quarter results suggest the selloff may be overdone. The company posted 10% year-over-year revenue growth in Q2 and beat earnings-per-share estimates, prompting management to raise full-year revenue guidance to 10% growth. The firm is projecting 14% earnings growth through 2026.

The stock trades at 20 times earnings, a modest multiple given the growth trajectory. CEO commentary defended elevated operating expenses as necessary investments in customer acquisition and long-term expansion, pushing back against investor concerns about margin pressure.

The performance gap between American Express and its payment network rivals has widened notably this year, with the company's shares underperforming despite fundamentals that support the raised guidance. The Motley Fool analysis frames the stock as undervalued relative to its growth runway.