A wise investment decision involves buying well-performing stocks at the right time and selling those that are at risk. A rise in share price and strong fundamentals indicate a stock’s bullish run.
Green Dot Corporation GDOT has performed extremely well in the past year and has the potential to sustain the momentum going forward. Therefore, if you have not taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.
What Makes Green Dot an Attractive Pick?
An Outperformer: A glimpse at the company’s price trend reveals that the stock has had an impressive run on the bourse in the past year. Shares of Green Dot have gained 36.1%, outperforming the 5.6% rise of the industry it belongs to.
Solid Zacks Rank: Green Dot carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or #2 offer attractive investment opportunities for investors. Thus, the company is a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: The direction of earnings estimate revisions serves as an important pointer when it comes to the price of a stock. The Zacks Consensus Estimate for 2019 earnings has moved up 3.1% over the past 90 days.
Positive Earnings Surprise History: Green Dot has an impressive earnings surprise history. The company outpaced the consensus mark in each of the trailing four quarters, delivering average positive earnings surprise of 18.4%.
Encouraging Estimates for 2019: The Zacks Consensus Estimate for 2019 earnings is currently pegged at $3.66, indicating year-over-year growth of 13.7%.
Growth Factors: Green Dot is gaining momentum on the back of long-term strategic plan to be a ‘New Kind of Bank’. The company is trying to generate solid revenues from increasing customer satisfaction. Its customer-oriented initiatives are expected to drive operating and financial momentum.
Strength across the company’s Banking as a Service (BaaS) platform programs is acting as a key growth catalyst. These programs are contributing significantly to the company’s gross dollar volume, active card and revenue growth. Green Dot invests heavily in a number of large BaaS programs to make the platform more productive.
The company’s long-lasting relationship with Walmart WMT is a key driver of its operating revenues. Green Dot’s operating revenues derived from products and services offered through Walmart represented 40%, 45% and 46% of total operating revenues in 2017, 2016 and 2015, respectively.
Financially, Green Dot is in good shape. As of Sep 30, 2018, the company had cash, cash equivalents and restricted cash of approximately $1.04 billion and no long-term debt.
Other Stocks to Consider
Other top-ranked stocks in the broader Zacks Business Services sector include Republic Services RSG and Waste Connections WCN, each carrying a Zacks Rank #2. Long-term expected EPS (three to five years) growth rate for Republic Services and Waste Connections is 10.7% and 11.7%, respectively.
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