GDOT - Green Dot cut to Hold at Needham on reaffirmed guide consumer unit headwinds
2023-05-08 09:42:39 ET
Green Dot ( NYSE: GDOT ) stock plunged 7.8% in Monday morning trading after Needham downgraded the stock to Hold from Buy as the fintech firm's reaffirmed 2023 outlook implies weaker prospects for the upcoming quarters, despite first-quarter top and bottom lines easily surpassing expectations.
The firm explained the Q1 beat as "largely the result of favorable seasonality in the tax processing business and better BaaS trends as some exiting partners are taking longer to de-convert from GDOT than originally planned," according to a note written to clients.
But the constant full-year outlook comes as the company sees accelerating attrition in its Consumer Services segment, "as legacy brand runoff is outpacing Go2Bank growth," Needham pointed out.
"Given the consumer segment headwinds, we believe it will be challenging for shares of GDOT to outperform over the next 12 months." GDOT gained 9.9% year-to-date but dropped 36.3% from the year before.
The Hold rating agrees with the Quant system rating but disagrees with the average Wall Street analyst rating of Buy.
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Green Dot cut to Hold at Needham on reaffirmed guide, consumer unit headwinds