Q3 Earnings Preview for Green Dot (NYSE:GDOT)

in EARNINGS/INVESTING IDEAS by

Green Dot Corporation (NYSE:GDOT) is scheduled to report Q3 earnings results after markets close for trading on November 4, 2020.

The company is expected to report earnings of $0.12/share on revenue of $246.6 million. The consensus earnings per share (EPS) of $0.12/share is based on a poll of 14 analysts and represents a decline in eps of −38.1% over the same quarter last year, when the company reported earnings of $0.20/share.

The revenue forecast of $246.6 million based on a poll of 11 analysts implies a year-over-year (YoY) growth in revenue of 2.6%. Last year the company reported $240.4 million in revenue for the quarter.

Expected to report EPS contraction of −38.1% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $246.62 $240.45 2.6%
EPS $0.12 $0.20 −38.1%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from Green Dot Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.32 $0.43 35.5% Beat
Q1, 2020 $0.93 $1.13 21.4% Beat
Q4, 2019 $0.11 $0.14 30.1% Beat
Q3, 2019 $0.02 $0.20 959.3% Beat
Q2, 2019 $0.63 $0.90 43.8% Beat
Q1, 2019 $1.43 $1.51 5.8% Beat
Q4, 2018 $0.50 $0.56 13.1% Beat
Q3, 2018 $0.43 $0.59 36.6% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 7.0%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 4, 2020 $52.08 $55.71 7.0% Increase
May 11, 2020 $31.50 $34.84 10.6% Increase
February 19, 2020 $34.10 $37.09 8.8% Increase
November 7, 2019 $29.41 $24.54 −16.6% Decline

Fundamentals And Technical Analysis

Green Dot Corporation is currently trading at $55.55/share, down −3.1% for the day. The company is trading at approximately 85.4% of its 52-week high of $64.97/share. The company’s stock price is down −0.3% since the last earnings report and down −5.8% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 48.46 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:GDOT Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 58.48 and a forward P/E multiple of 31.86.

Green Dot Corporation’s current share price also implies a price-to-book (P/B) multiple of 2.94. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $55.55
P/E Ratio 58.5x
P/E Ratio (Fwd) 31.9x
PEG Ratio −1.1
Total Debt / Total Capital 0.9%
Levered Free Cash Flow $112.5 million
Price To Sales 2.5x

Finbox

Green Dot Corporation is a mid-cap stock with a market capitalization of $3.06 billion. The company operates in the Financials sector and the Consumer Finance industry.

Green Dot Corporation operates as a financial technology and bank holding company in the United States. It operates in two segments, Account Services, and Processing and Settlement Services. The company offers deposit account programs, such network-branded reloadable prepaid debit cards under the consumer brand names of GPR cards, consumer and small business checking accounts, network-branded gift cards, secured credit cards, payroll debit cards, and other financial services. It also provides swipe reload services that allow consumers to add funds at the point-of-sale at any participating retailer to accounts the company issue or manage and accounts issued by any third-party bank or program; MoneyPak, a product that allows a consumer to add funds at the point-of-sale at any participating retailer to accounts; and e-cash remittance services that enable consumer to transfer funds to a smartphone, as well as offers disbursement services through Simply Paid platform. In addition, the company offers prepaid cards, debit cards, consumer cash processing services, wage disbursements, and tax refund processing services, as well as issuing, settlement, and capital management services. Further, it provides mobile banking, loan disbursement accounts, mobile P2P, money transfer, and instant payment services. The company markets its products under the Green Dot, GoBank, MoneyPak, TPG, and other brands. Green Dot Corporation markets and sells its products and services through retail stores, various direct-to-consumer online, tax preparation companies and individual tax preparers, and apps, as well as distributes through ‘Banking as a Service’ platform. The company was formerly known as Next Estate Communications, Inc. and changed its name to Green Dot Corporation in October 2005. Green Dot Corporation was incorporated in 1999 and is headquartered in Pasadena, California.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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