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Green Dot (GDOT) Stock Appreciates 7.4 % on Q3 Earnings Beat

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Green Dot Corporation (GDOT - Free Report)  delivered strong third-quarter 2022 results, wherein both earnings and revenues beat the respective Zacks Consensus Estimate.

The better-than-expected results and impressive EPS guidance appeared to have pleased investors as the stock has shot up 7.4% since the earnings release on Nov 11. GDOT has raised its 2022 non-GAAP EPS guidance. The company now expects EPS to be in the range of $2.42-$2.51 compared with the previous expectation of $2.35-$2.49. The midpoint ($2.47) is above the current Zacks Consensus Estimate of $2.44 per share.

Quarterly non-GAAP earnings of 44 cents per share beat the consensus estimate by 22.2% and increased 2.3% on a year-over-year basis. Non-GAAP operating revenues of $337.2 million beat the consensus mark by 3.3% but decreased slightly year over year.

GDOT shares have declined 46.5% year to date compared with the 13.6% decline of the industry it belongs to.

Segmental Revenues

The Consumer Services segment’s revenues came in at $135.8 million, down 18.9% from the year-ago quarter’s level. The B2B Services segment’s revenues of $158.2 million increased 33.9% year over year. Money Movement Services segment’s revenues were down 21.6% year over year to $14.7 million.

Key Metrics

Gross dollar volume increased 13.9%year over year to $18.7 billion. Purchase volume fell 12.4% from the prior-year quarter’s level to $6.4 billion. GDOT ended the quarter with 4.61 million active accounts, down 19.4% year over year.

Operating Results

Adjusted EBITDA of $45.5 million decreased 2% on a year-over-year basis. Adjusted EBITDA margin of 13.5% was down from the year-ago quarter’s level of 14.1%.

Balance Sheet

Green Dot exited the quarter with unrestricted cash and cash equivalents balance of $813.2 million compared with $776.3 million reported at the end of the prior quarter. GDOT had no long-term debt. GDOT generated $64.6 million in cash from operating activities in the quarter.

2022 Guidance

GDOT continues to expect full-year non-GAAP total operating revenues to be between $1.394 billion and $1.43 billion. The midpoint ($1.412 billion) of the guided range is below the Zacks Consensus Estimate of $1.42 billion.

The company narrowed its range for adjusted EBITDA to $232-$238 million from the previously guided range of $230-$240 million while keeping the midpoint reaffirmed.

Green Dot currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Recent Performance of Some Other Business Services Companies

Equifax (EFX - Free Report) reported stellar third-quarter 2022 results, wherein both its earnings and revenues surpassed the respective Zacks Consensus Estimate.

EFX’s adjusted earnings of $1.73 per share beat the Zacks Consensus Estimate by 5.5% but decreased 6.5% on a year-over-year basis. Revenues of $1.24 billion beat the consensus estimate by 2.3% and improved 1.8% year over year.  

Omnicom (OMC - Free Report) also reported better-than-expected third-quarter 2022 results.

OMC’s earnings of $1.77 per share beat the consensus mark by 7.9% and increased 7.3% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 3% and increased slightly year over year.

The Interpublic Group of Companies (IPG - Free Report) reported third-quarter 2022 adjusted earnings of 63 cents per share, beating the Zacks Consensus Estimate by 6.8%. The bottom line has been constant on a year-over-year basis.

IPG’s net revenues of $2.3 billion beat the consensus estimate by 0.3% but declined 9.7% on a year-over-year basis. Total revenues of $2.64 billion increased 3.8% year over year.

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