UPDATE: Nomura Raises PT on Green Dot Following 2Q13 EPS Report
In a report published Wednesday, Nomura analyst Bill Carcache reiterated a Neutral rating on Green Dot (NYSE: GDOT), and raised the price target from $16.00 to $20.00.
In the report, Nomura noted, “GDOT reported 2Q13 adj. EPS of $0.33, vs. our / cons. ests. of $0.32 / $0.30 (adj. for outliers). The beat was driven by higher cash transfer and interchange revenues and higher adj. EBITDA margins (20.8% vs. cons. of 18.8%), partially offset by lower card fees. GDOT announced it is moving into the check cashing channel this quarter, putting it in direct competition with its largest rival, NetSpend. We're confident GDOT's products will resonate well with the target market, but success in the channel will ultimately depend on the scale and quality of its check cashing partners. GDOT is effectively combating competitive pressure by expanding distribution and retaining stickier, higher quality customers. In our view, the uncertainty around its earnings visibility has been significantly reduced. We're raising our 2013 / 14 EPS estimates to reflect better-than-expected revenue growth. We're also raising our PT to $20 (from $16) to reflect 13x (up from 11x) on our revised 2014 EPS estimate.”
Green Dot closed on Tuesday at $20.11.
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