Green Dot Corp. operates as a financial technology leader and bank holding company, which 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. It operates through the following segments: Account Services; and Processing and Settlement Services. The Account Services segment offers deposit account programs that can be acquired through omni-channel distribution platform. The Processing and Settlement Services segment comprises of products and services that specialize in facilitating the movement of funds on behalf of consumers and businesses. The company was founded by Steven W. Streit in October 1, 1999 and is headquartered in Pasadena, CA.
GDOT Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for GDOT, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Green Dot Corp ranked in the 25th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 69.17%. As for the metrics that stood out in our discounted cash flow analysis of Green Dot Corp, consider:
The company's balance sheet shows it gets 99% of its capital from equity, and 1% of its capital from debt. Notably, its equity weight is greater than 95.22% of US equities in the Financial Services sector yielding a positive free cash flow.
The business' balance sheet reveals debt to be 1% of the company's capital (with equity being the remaining amount). Approximately only 6.26% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
GDOT's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 3%; for context, that number is higher than 52.49% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Green Dot Corp? See HLNE, MA, NMFC, TPRE, and AMK.
The stock market was having a strong day on Wednesday in reaction to the Georgia Senate runoff election results, and the financial sector was one of the biggest winners. As of 1:50 p.m. EST, Green Dot shares had gained 10% for the day. On Wednesday, Green Dot revealed a new checking account product called GO2bank, the company's latest banking solution aimed at customers who don't have traditional bank accounts.
The stock price of Green Dot (NYSE: GDOT) was up big Wednesday morning following the company's launch of GO2bank, its new mobile bank. "Too many Americans struggle to access their money, are paying too much for financial products, and are negatively impacted by the lack of solutions designed to suit their needs," Green Dot CEO Dan Henry said. Green Dot officials point out that 7.1 million U.S. households, or 5.4%, were unbanked in 2019.