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Why Is Green Dot (GDOT) Up 16.5% Since Last Earnings Report?

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It has been about a month since the last earnings report for Green Dot (GDOT - Free Report) . Shares have added about 16.5% 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 its most recent earnings report in order to get a better handle on the important catalysts.

Green Dot Surpasses Q2 Earnings & Revenues Estimates

Green Dot reported impressive second-quarter 2021 results, with both earnings and revenues beating the Zacks Consensus Estimate.

Quarterly adjusted earnings of 68 cents per share surpassed the consensus estimate by 47.8% and increased 58% on a year-over-year basis. Non-GAAP operating revenues of $357.9 million surpassed the consensus mark by 14.6% and increased 19% year over year.

Segmental Revenues

The Consumer Services segment’s revenues came in at $182.1 million, up 12% from the year-ago quarter’s level. The B2B Services segment’s revenues of $112.6 million increased 46.9% year over year. Money Movement Services segment’s revenues were up year over year to $66 million.

Key Metrics

Gross dollar volume climbed 15.2% year over year to $17.4 billion. Purchase volume rose 4.6% from the prior-year quarter’s level to $8.9 billion. The company ended the quarter with six million active accounts, down 3.5% year over year.

Operating Results

Adjusted EBITDA of $62.9 million improved 39% on a year-over-year basis. Adjusted EBITDA margin of 17.6% was up from the year-ago quarter’s level of 15.1%.

Balance Sheet

Green Dot exited the quarter with cash, cash equivalents balance of $1.9 billion compared with $2.7 billion witnessed at the end of the prior quarter. The company had no long-term debt. Green Dot generated $38.8 million of cash from operating activities and capex was $13.4 million.

Guidance

Green Dot  currently expects non-GAAP EPS to be between $2.13 and $2.27, compared with the previous expectation of $2.06 to $2.15. Non-GAAP total operating revenues are currently anticipated between $1.33 billion and $1.35 billion, compared with the previous expectation of $1.27 to $ 1.29 billion.

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 19.42% due to these changes.

VGM Scores

At this time, Green Dot has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. 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. Notably, Green Dot has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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