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Green Dot (GDOT) Rides on Prolonged Partnership With Walmart

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Green Dot Corporation GDOT currently benefits from a long-standing relationship with Walmart and focuses on ensuring long-term growth of its businesses.

GDOT delivered better-than-expected first-quarter 2022 results. Quarterly earnings (excluding 36 cents from non-recurring items) of $1.06 per share beat the consensus estimate by 24.7% and increased 76.7% on a year-over-year basis. Non-GAAP operating revenues of $394.7 million surpassed the consensus mark by 1.4% and increased marginally year over year.

How is Green Dot Faring?

Green Dot’s long-standing relationship with Walmart is a key driver of its operating revenues. GDOT has been providing Walmart-branded GPS cards since the launch of the Walmart MoneyCard program in 2007. GDOT has been issuing those card accounts since 2014.

GDOT designs and delivers the Walmart MoneyCard product and provides all ongoing program support, including network IT, website functionality, regulatory and legal compliance, customer service and loss management. Walmart provides it with shelf space to offer Green Dot-branded cards and GoBank checking account products.

Green Dot’s operating revenues derived from products and services offered through Walmart represented 24%, 27% and 34% of total operating revenues for 2021, 2020 and 2019, respectively.

GDOT is focused on ensuring long-term growth of its businesses. Green Dot’s efforts are directed toward acquiring long-term users of its products, improving brands and image, building market adoption and awareness of products,  and increasing card usage and customer retention. Its sales and marketing efforts are focused on a broad group, ranging from never-banked to fully-banked consumers.

However, Green Dot's current ratio at the end of the March quarter was pegged at 0.49, lower than the current ratio of 0.50 reported at the end of the December quarter and the prior-year quarter’s 0.82. Decreasing current ratio is not desirable as it indicates that a company may have problems meeting its short-term debt obligations.

Green Dot currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Stocks to Consider

Investors interested in the broader Business Services sector may also check out some other stocks worth considering like Avis Budget Group, Inc. CAR, Cross Country Healthcare CCRN and Automatic Data Processing, Inc. ADP.

Avis Budget sports a Zacks Rank #1 at present. CAR has a long-term earnings growth expectation of 19.4%.

Avis Budget delivered a trailing four-quarter earnings surprise of 102%, on average.

Cross Country Healthcare sports a Zacks Rank of 1. CCRN has a long-term earnings growth expectation of 6.9%.

Cross Country Healthcare delivered a trailing four-quarter earnings surprise of 29.2%, on average.

Automatic Data Processing carries a Zacks Rank of 2, currently. ADP has a long-term earnings growth expectation of 12%.

Automatic Data Processing delivered a trailing four-quarter earnings surprise of 6.2%, on average.  


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