Yahoo Finance Green Dot (GDOT) Up 10.3% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Green Dot (GDOT). Shares have added about 10.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Green Dot due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Green Dot Miss on Q4 Earnings
Green Dot Corporation reported mixed fourth-quarter 2023 results, with earnings missing the Zacks Consensus Estimate but revenues surpassing the same
GDOT’s earnings per share (excluding 59 cents from non-recurring items) of 14 cents missed the consensus estimate by 17.7%. The metric declined 58.8% on a year-over-year basis. Revenues of $361.7 million outpaced the Zacks Consensus Estimate by 3.3% and improved 5.6% year over year.
Segmental Revenues
B2B Services revenues increased 39.7% year over year to $221.8 million. The same surpassed our model estimate of $174.8 million. The uptick was primarily driven by GDOT’s BaaS channel.
The Consumer Services segment’s revenues totaled $111.5 million, down 21.1% from the year-ago level. It missed our estimate of $117.9 million. The decrease in revenues from retail and direct-to-consumer channels affected this segment’s revenues.
Money Movement Services’ revenues declined 11.2% year over year to $29.4 million. It missed our estimate of $55.5 million. This segment’s revenues are affected due to the decline in cash transfer volume and the timing of tax refund volume.
Corporate and Other revenues declined more than 100% from the year-ago quarter to a loss in revenues of $1 million. The metric beat our estimate of a loss in revenues of $5.3 million. The loss in revenues is due to higher interest rates, as this segment’s revenues reflect interest income at the bank.
Key Metrics
GDOT’s gross dollar volume rose 31.7% year over year to $26.4 billion. Purchase volume fell 16.2% from the year-ago quarter to $5.3 billion. The company ended the quarter with 3.6 million active accounts, down 14% year over year.
Operating Results
Adjusted EBITDA was $25.7 million, down 27.3% on a year-over-year basis. The adjusted EBITDA margin declined 340 basis points to 7.1%.
Balance Sheet
Green Dot exited the quarter with an unrestricted cash and cash equivalent balance of $682.3 million compared with $711.4 million in third-quarter 2023. GDOT had no long-term debt. It utilized $34.9 million of cash from operating activities in the quarter under review. CapEx was $20.4 million.
2024 Guidance
GDOT expects earnings per share of $1.45-$1.59. Total operating revenues are anticipated between $1.55 billion and $1.6 billion. Adjusted EBITDA is projected to be $170-$180 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -21.52% due to these changes.
VGM Scores
At this time, Green Dot has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Green Dot has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Green Dot is part of the Zacks Financial Transaction Services industry. Over the past month, Fidelity National Information Services (FIS), a stock from the same industry, has gained 9.9%. The company reported its results for the quarter ended December 2023 more than a month ago.
Fidelity National reported revenues of $2.51 billion in the last reported quarter, representing a year-over-year change of -32.4%. EPS of $0.94 for the same period compares with $1.71 a year ago.
For the current quarter, Fidelity National is expected to post earnings of $0.95 per share, indicating a change of -26.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.5% over the last 30 days.
Fidelity National has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Green Dot Corporation (GDOT) : Free Stock Analysis Report
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