A month has gone by since the last earnings report for Green Dot (GDOT Quick QuoteGDOT - Free Report) . Shares have lost about 0.4% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Green Dot due for a breakout? 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 Q4 Earnings & Revenues Estimates

Green Dot reported strong fourth-quarter 2020 results, with earnings and revenues beating the Zacks Consensus Estimate. In spite of better-than-expected results, shares of the company declined 2.2% since the earnings release.

Quarterly adjusted earnings (excluding 76 cents from non-recurring items) of 31 cents beat the consensus estimate by 93.8% and surged more than 100% on a year-over-year basis. Non-GAAP operating revenues of $274.5 million surpassed the consensus mark by 7.6% and increased 10.1% year over year.

Segmental Revenues

The Account Services segment’s non-GAAP operating revenues came in at $233.7 million, up 23.2% from the year-ago quarter’s levels. The Processing and Settlement Services segment’s non-GAAP operating revenues of $43.1 million fell 22.3% year over year

Key Metrics

Gross dollar volume climbed 35.4% year over year to $14.3 billion. Gross dollar volume from direct deposit sources increased 23% year over year to $8.8 billion. Purchase volume rose 9% from the prior-year quarter’s levels to $6.9 billion. The company ended the fourth quarter with 5.5 million active accounts (up 8.1%) and 11.3 million cash transfers (down 6.5% year over year). The number of tax refunds processed was 0.11 million, up 57.1% year over year.

Operating Results

Adjusted EBITDA of $34.8 million increased 59% on a year-over-year basis. Adjusted EBITDA margin of 12.7% was up from the year-ago quarter’s level of 9.2%.

Balance Sheet

Green Dot exited the quarter with cash, cash equivalents and restricted cash balance of $1.5 billion compared with the $2.1 billion witnessed at the end of the prior quarter. The company had no long-term debt. The company generated $10.3 million of cash from operating activities and capex was $15.1 million.

2021 Guidance

The company expects 2021 non-GAAP total operating revenues in the range of $1.23-$1.25 billion, which suggests 3% year-over-year increase at the mid-point.  Non-GAAP EPS is expected to be between $2.06 and $2.15, marking no changes year over year. Adjusted EBITDA is anticipated between $210 million and $217 million, which calls for 4% year-over-year increase at the mid-point.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -21.86% due to these changes.

VGM Scores

Currently, Green Dot has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. 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. It's no surprise Green Dot has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.