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Green Dot (GDOT) Benefits From Its Expansion Initiatives

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Green Dot Corporation (GDOT - Free Report) is being aided by its long-standing relationship with Walmart. GDOT has been using its Banking as a Service (BaaS) platform to grow its market presence.

Green Dot delivered strong fourth-quarter 2022 results, wherein earnings and revenues beat the Zacks Consensus Estimate. Quarterly non-GAAP earnings of 34 cents per share beat the consensus estimate by 54.6% and increased 25.9% on a year-over-year basis. Non-GAAP operating revenues of $336.6 million beat the consensus mark by 5.1% and increased 1.8% year over year.

How is GDOT Doing?

Green Dot has been focused on ensuring long-term growth of its businesses. The company makes efforts toward the acquisition of long-term users of its products, improving brands and image, building market adoption and awareness of products, increasing card use, and customer retention.

Green Dot’s long-standing relationship with Walmart is a key driver of its operating revenues. The company has been providing Walmart-branded GPS cards since the launch of the Walmart MoneyCard program in 2007. Walmart provides GDOT with shelf space to offerGreen Dot-branded cards and GoBank checking account products. Green Dot’s operating revenues derived from products and services offered through Walmart represented 21%, 24% and 27% of total operating revenues for 2022, 2021 and 2020, respectively.

GDOT is utilizing its BaaS programs to grow its addressable market. The company partners with top consumer and technology companies, including Amazon, Apple, Intuit and Uber, to design and develop their fintech banking solutions through its BaaS platform.

Key Risk

Green Dot's current ratio at the end of the December quarter was pegged at 0.37, lower than the prior-year quarter’s 0.50. A decreasing current ratio is undesirable as it indicates that the company may have problems meeting its short-term debt obligations.

GDOT belongs to the Zacks Financial Transaction Services industry. Here’s how the following stocks from the same space performed this earnings season:

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

EFX’s adjusted earnings of $1.52 per share beat the Zacks Consensus Estimate by 2.7% but decreased 17.4% on a year-over-year basis. Revenues of $1.2 billion beat the Zacks Consensus Estimate by 1.5% but decreased 4.4% year over year.

Fiserv’s fourth-quarter 2022 earnings met the Zacks Consensus Estimate, while revenues beat the same.

FISV’s adjusted earnings per share of $1.91 increased 21.7% year over year. Adjusted revenues of $4.36 billion beat the Zacks Consensus Estimate by 0.8% and increased 2.4% year over year.

Envestnet, Inc. (ENV - Free Report) reported mixed fourth-quarter 2022 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.

ENV reported fourth-quarter 2022 adjusted earnings per share of 45 cents, which outpaced the Zacks Consensus Estimate by 4.7% but declined 10% year over year. Revenues of $292.9 million missed the consensus mark by 1.1% and decreased 8.4% year over year.


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