Back to top

Analyst Blog

Green Dot Corporation (GDOT - Snapshot Report) is set to report third-quarter 2013 results on Oct 31 after the closing bell.  Last quarter it posted a 4.17% positive surprise. Let’s see how things are shaping up for this announcement.

Factors to Consider This Quarter

Green Dot, which markets prepaid debit cards and related services both at retail locations and online, is facing strong competition from major players like American Express. American Express recently launched a reloadable prepaid card, giving stiff competition to Green Dot’s Walmart MoneyCard. AmEx’s new card has a lower monthly maintenance fee compared to Green Dot's card, making it more attractive to customers.

Moreover, GreenDot faces competition from new entrants in the market like drug stores and grocery store operators, which have launched their own reloadable prepaid cards.

These factors are expected to negatively affect Green Dot’s earnings this quarter.

Earnings Whispers?

Our proven model does not conclusively show that Green Dot is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP  and a Zacks Rank of #1, #2 or #3 for this to happen. That is not the case here as you will see below.

Negative Zacks ESP:  The Expected Surprise Prediction or ESP for Green Dot is -5.88%. That is because the Most Accurate estimate stands at 16 cents while the Zacks Consensus Estimate is higher at 17 cents.

Zacks Rank: Green Dot’s Zacks Rank #4 (Sell) when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:  

MasterCard Inco. (MA - Analyst Report),has Earnings ESP of +0.14% and a Zacks Rank #2 (Buy).

VeriFone Systems, Inc. (PAY - Analyst Report), has Earnings ESP of +5.56% and a Zacks Rank #2 (Buy).

SouFun Holdings Ltd. (SFUN - Snapshot Report), has Earnings ESP of +1.16% and a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.55 +11.64%
CHINA BIOLO… CBPO 55.57 +7.40%
BITAUTO HOL… BITA 96.14 +5.58%
LUXOFT HOLD… LXFT 38.77 +3.64%
INSITE VISI… INSV 0.30 +3.41%