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Charles River Associates (CRAI) - free report >>
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Here's Why You Should Hold Green Dot (GDOT) Stock for Now
Green Dot Corporation (GDOT - Free Report) is currently benefiting from strength in its GO2bank business and long-standing relationship with Walmart. Recent platform conversions have positioned the company for annualized cost savings.
Future Potential Should Outperform Current Headwinds
Green Dot’s bottom line stayed weak in the first quarter of 2024 due to the sunsetting of portfolios and higher expenses. We expect the company’s bottom line to gain strength going forward, driven by cost savings from platform conversions completed recently and investments in product, business development and compliance infrastructure.
We believe GO2bank will be the key driver of GDOT’s revenues going forward. The company is in the process of restructuring its business to ensure long-term sustainable growth. This involves sunsetting several old products and moving customers to GO2bank. Currently, GO2bank constitutes a considerable majority of active accounts and its growth is likely to have a major positive impact on the company’s top line going forward.
Green Dot Corporation Revenue (TTM)
Green Dot Corporation revenue-ttm | Green Dot Corporation Quote
Green Dot has a long-standing relationship with Walmart. It designs and delivers Walmart MoneyCard products and provides program support that includes network IT, website functionality, regulatory and legal compliance, customer service and loss management. It also sells certain Walmart-branded open-loop gift cards. Walmart provides Green Dot with shelf space to offer Green Dot-branded and GoBank checking account products.
Green Dot’s operating revenues derived from products and services offered through Walmart represented 17%, 21%, and 24% of total operating revenues for 2023, 2022, and 2021, respectively. While it offers some concentration risk, the partnership remains a key driver for GDOT’s operating revenues.
Zacks Rank and Stocks to Consider
Green Dot currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector are Barrett Business Services (BBSI - Free Report) and Charles River Associates (CRAI - Free Report) .
Barrett Business Services has a Zacks Rank of 2 (Buy) at present. BBSI has a long-term earnings growth expectation of 14%. It delivered a trailing four-quarter earnings surprise of 38.6%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Charles River Associates currently carries a Zacks Rank of 2. It has a long-term earnings growth expectation of 16%. CRAI delivered a trailing four-quarter earnings surprise of 19.1%, on average.