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Reasons Why Green Dot (GDOT) Should be Retained by Investors
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Green Dot Corporation (GDOT - Free Report) is benefiting from a healthy topline, improved operations in fraud and customer care and diligent cost handling. But without a dividend declaration, investors seeking cash dividends will be less interested in picking this stock.
The company has an impressive earning surprise history, beating the Zacks Consensus Estimate of earnings in all four trailing quarters, at an average surprise of 36%.
Factors in Favour
GDOT eyes long-term growth banking on improved cost structure, expansion of technology platforms and new customer acquisitions. Operating expenses of $334.4 million decreased 1.3% on a year-over-year basis in fourth-quarter 2022.GDOT completed its first platform conversion in the fourth quarter which can be considered a boosting technology transformation.
Once the transformation is complete, the company’s margin expects to see an uptick due to lower processing expenses. The company is continuing its efforts to reduce fraud losses by investing in an anti-money laundering program.
GDOT has been in a continuous pursuit to increase its addressable market with its Banking as a service program. The company’s partnership with Amazon, Apple and Uber among others is boosting the performance of the platform. The B2B service segment grew 30% year over year in 2022, positively impacted by higher program management services earned from BaaS partners. In the reported year the company generated 30% of the operating revenue from a single BaaS partner.
A long-standing relationship with Walmart bodes well for the company. The company derived 21% of the total operating revenue from the products offered through Walmart.
Some Risks
Green Dot’s current ratio at the end of the December quarter was 0.37, lower than the 0.50 reported a year ago. A decline in the current ratio is not desirable as it indicates that the company may have problems meeting its short-term obligations.
During the last six months, GDOT has plunged 12.4% against its industry’s 10.5% growth.
Zacks Rank and Stocks to Consider
GDOT currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector are as follows:
Omnicom Group's (OMC - Free Report) internal development initiatives and shareholder-friendly policies ensure long-term profitability. The Zacks Consensus Estimate for the company’s first-quarter 2023 earnings is pegged at $1.39, which has been revised downward 2.1% in the past 60 days.
The consensus estimate for the full year is $7.15 per share. This has been revised upward 13.7% in the past 60 days. For first-quarter 2023, OMC’s earnings are expected to match the year-ago reported figure of $1.39. The company’s earnings are expected to grow 3.2% on a year-over-year basis in 2023. The company currently sports a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ICF International (ICFI - Free Report) is being aided by the strong government business, courtesy of improvement in the business development pipeline and win rate. The Zacks Consensus Estimate for the company’s first-quarter 2023 earnings is pegged at $1.41, which has been revised upward 6% in the past 60 days.
The consensus estimate for the full year is $6.3 per share. This has been revised upward 7.3% in the past 60 days. For first-quarter 2023, ICFI’s earnings are expected to register 7.6% growth on a year-over-year basis. For 2023, the company’s earnings are expected to grow 9.2% on a year-over-year basis. The company currently sports a Zacks Rank of 1.
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Reasons Why Green Dot (GDOT) Should be Retained by Investors
Green Dot Corporation (GDOT - Free Report) is benefiting from a healthy topline, improved operations in fraud and customer care and diligent cost handling. But without a dividend declaration, investors seeking cash dividends will be less interested in picking this stock.
The company has an impressive earning surprise history, beating the Zacks Consensus Estimate of earnings in all four trailing quarters, at an average surprise of 36%.
Factors in Favour
GDOT eyes long-term growth banking on improved cost structure, expansion of technology platforms and new customer acquisitions. Operating expenses of $334.4 million decreased 1.3% on a year-over-year basis in fourth-quarter 2022.GDOT completed its first platform conversion in the fourth quarter which can be considered a boosting technology transformation.
Once the transformation is complete, the company’s margin expects to see an uptick due to lower processing expenses. The company is continuing its efforts to reduce fraud losses by investing in an anti-money laundering program.
GDOT has been in a continuous pursuit to increase its addressable market with its Banking as a service program. The company’s partnership with Amazon, Apple and Uber among others is boosting the performance of the platform. The B2B service segment grew 30% year over year in 2022, positively impacted by higher program management services earned from BaaS partners. In the reported year the company generated 30% of the operating revenue from a single BaaS partner.
Green Dot Corporation Revenue (TTM)
Green Dot Corporation revenue-ttm | Green Dot Corporation Quote
A long-standing relationship with Walmart bodes well for the company. The company derived 21% of the total operating revenue from the products offered through Walmart.
Some Risks
Green Dot’s current ratio at the end of the December quarter was 0.37, lower than the 0.50 reported a year ago. A decline in the current ratio is not desirable as it indicates that the company may have problems meeting its short-term obligations.
During the last six months, GDOT has plunged 12.4% against its industry’s 10.5% growth.
Zacks Rank and Stocks to Consider
GDOT currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector are as follows:
Omnicom Group's (OMC - Free Report) internal development initiatives and shareholder-friendly policies ensure long-term profitability. The Zacks Consensus Estimate for the company’s first-quarter 2023 earnings is pegged at $1.39, which has been revised downward 2.1% in the past 60 days.
The consensus estimate for the full year is $7.15 per share. This has been revised upward 13.7% in the past 60 days. For first-quarter 2023, OMC’s earnings are expected to match the year-ago reported figure of $1.39. The company’s earnings are expected to grow 3.2% on a year-over-year basis in 2023. The company currently sports a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ICF International (ICFI - Free Report) is being aided by the strong government business, courtesy of improvement in the business development pipeline and win rate. The Zacks Consensus Estimate for the company’s first-quarter 2023 earnings is pegged at $1.41, which has been revised upward 6% in the past 60 days.
The consensus estimate for the full year is $6.3 per share. This has been revised upward 7.3% in the past 60 days. For first-quarter 2023, ICFI’s earnings are expected to register 7.6% growth on a year-over-year basis. For 2023, the company’s earnings are expected to grow 9.2% on a year-over-year basis. The company currently sports a Zacks Rank of 1.