In a report released today, Michael Grondahl from Northland Securities downgraded Green Dot (GDOT) to Hold, with a price target of $58. The company’s shares closed yesterday at $63.27.
Grondahl observed:
“We believe this change in course is inherently riskier and creating a lot of uncertainty. It sounds like GDOT is losing one and done customers to other competitors too like and Chime. We wonder if the WMT MoneyCard introduced in January 2016 has run its cycle and what are the economics of new BaaS customers vs legacy WMT customers paying a $6 monthly fee, something that has not been clear for a while. Would a millennial pay this $6 monthly fee? We worry it takes many new BaaS accounts to equal one legacy customer. Of the 6M active accounts at GDOT, we believe there is probably 1.5M or more BaaS accounts. As such, until we get more clarity on BAAS vs non BaaS economics, we are stepping aside and downgrading to Market Perform and reducing our PT to $58.”
According to TipRanks.com, Grondahl is a 5-star analyst with an average return of 23.3% and a 65.4% success rate. Grondahl covers the Financial sector, focusing on stocks such as Front Yard Residential Corporation, Altisource Portfolio Solutions SA, and Health Insurance Innovations.
Green Dot has an analyst consensus of Moderate Buy, with a price target consensus of $81.25, which is a 28.4% upside from current levels. In a report released today, BTIG also downgraded the stock to Hold.
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Green Dot’s market cap is currently $3.35B and has a P/E ratio of 28.98. The company has a Price to Book ratio of 3.68.
Based on the recent corporate insider activity of 116 insiders, corporate insider sentiment is negative on the stock.
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Green Dot Corp. operates as a financial technology leader and bank holding company. It engages in the provision of prepaid cards, debit cards, checking accounts, secured credit cards, payroll debit cards, consumer cash processing services, wage disbursements, and tax refund processing services.
