Green Dot Corporation Just Missed Earnings - But Analysts Have Updated Their Models
Green Dot Corporation (NYSE:GDOT) came out with its full-year results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It looks like a pretty bad result, all things considered. Although revenues of US$1.5b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 75% to hit US$0.13 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for Green Dot
Taking into account the latest results, the consensus forecast from Green Dot's seven analysts is for revenues of US$1.58b in 2024. This reflects a reasonable 5.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 220% to US$0.41. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.52b and earnings per share (EPS) of US$0.80 in 2024. So it's pretty clear the analysts have mixed opinions on Green Dot after the latest results; even though they upped their revenue numbers, it came at the cost of a large cut to per-share earnings expectations.
The consensus price target fell 15% to US$10.67, suggesting that the analysts are primarily focused on earnings as the driver of value for this business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Green Dot at US$15.00 per share, while the most bearish prices it at US$7.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Green Dot's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.7% growth on an annualised basis. This is compared to a historical growth rate of 7.7% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Green Dot.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Green Dot. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Green Dot going out to 2025, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 3 warning signs for Green Dot you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
