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Nomura Securities Answers Investors' Questions on Green Dot (GDOT): 30% Additonal Downside Is Possible

June 7, 2012 8:23 AM EDT Send to a Friend
Get Alerts GDOT Hot Sheet
Price: $17.41 +3.38%

Rating Summary:
    8 Buy, 21 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 20 | Down: 27 | New: 8
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Nomura Securities maintains a 'Neutral' on Green Dot (NYSE: GDOT) price target of $22.00 (from $29.00).

Analyst, Bill Carcache, said, "With GDOT shares continuing to hit new lows, we’ve received a number of questions from investors wondering whether shares have hit a bottom. In this note, we describe why we believe additional downside is possible...Possible headwinds include: (1) increase in Walmart’s commission share from 22% in 2012 to 26% in 2013, (2) integration risk associated with recently completed acquisitions, (3) difficult-to-achieve growth targets given the loss of Turbotax, (4) continued margin pressure, and (5) negative impact from new, low-cost competitor offerings."

Also noted, "In contrast to other payments industry players that report results on a GAAP basis and call out one-timers only periodically (e.g., Visa (NYSE: V), MasterCard (NYSE: MA), American Express (NYSE: AXP), Capital One (NYSE: COF), Discover (NYSE: DFS), Total Systems (NYSE: TSS), Western Union (NYSE: WU)), GDOT consistently pushes non-GAAP EPS. We view non-GAAP EPS as an illusory earnings metric that inappropriately ignores the economic cost of options granted to Walmart and stockbased compensation expense."

For an analyst ratings summary and ratings history on Green Dot click here. For more ratings news on Green Dot click here.

Shares of Green Dot closed at $21.73 yesterday.




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