Green Dot (GDOT) to Report Q4 Earnings: What's in Store?

Green Dot Corporation GDOT is scheduled to report fourth-quarter 2018 results on Feb 20, after market close.

Strength across segments, operating performance and lower effective tax rate are likely to boost Green Dot’s results.

Over the past year, shares of Green Dot have gained 23%, outperforming the 13.9% rise of the industry it belongs to.

 

Let's check out how things are shaping up for the announcement.

Strength Across Segments to Drive the Top Line

The Zacks Consensus Estimate for fourth-quarter 2018 revenues is pegged at $236.55 million, indicating year-over-year growth of 11.1%. The upside is likely to be driven by strength across Account Services and Processing and Settlement segments. The company’s Banking as a Service (BaaS) platform continues to grow and should contribute to the company’s top line. In third-quarter 2018, revenues of $230.6 million increased 14.4% year over year.

Going by segments, Accounts Services revenues are expected to be driven by strong organic momentum across all revenue divisions and product lines, with solid contributions from GDV and purchase volume.

Processing and Settlement Services should benefit from organic growth in each of the segment's various product lines, including cash transfers, SimplyPaid worker disbursements and increasing transaction counts.

Green Dot Corporation Revenue (TTM)

 

Green Dot Corporation Revenue (TTM) | Green Dot Corporation Quote

Bottom Line Expectations

The Zacks Consensus Estimate for earnings per share (EPS) in the to-be-reported quarter is pegged at 50 cents, indicating year-over-year growth of 72.4%. The bottom line is expected to benefit from strong adjusted EBITDA growth, interest income from the investment of cash deposits held at Green Dot Bank and lower effective tax rate.

In third-quarter 2018, adjusted earnings of 59 cents per share increased 73.5% year over year.

What Our Model Says

Please note that according to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially when the company is seeing negative estimate revisions. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Green Dot has an Earnings ESP of -2.00% and a Zacks Rank #3.

Green Dot Corporation Price and EPS Surprise

 

Green Dot Corporation Price and EPS Surprise | Green Dot Corporation Quote

Stocks to Consider

Here are a few stocks from the broader Zacks Business Services sector that investors may consider as our model shows that these have the right combination of elements to beat estimates.

Stericycle SRCL has an Earnings ESP of +3.04% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

IQVIA Holdings IQV has an Earnings ESP of +0.85% and a Zacks Rank #3.

Republic Services RSG has an Earnings ESP of +0.33% and a Zacks Rank #3.

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