UPDATE: Green Dot Corporation Upgrades Green Dot Corporation to Buy, Raises PT on Higher Estimates, Multiple Expansion

In a report published Tuesday, Compass Point analyst Douglas Greiner upgraded the rating on Green Dot Corporation (NYSE: GDOT) from Neutral to Buy, and raised the price target from $26.00 to $30.00.In the report, Compass Point noted, “We raise our 12 month price target from $26 to $30 on slightly higher estimates and meaningful multiple expansion. Given the +30% upside from current levels we upgrade our rating from Neutral to Buy. Moreover, for investors looking out more than 12 months, it appears that EBITDA growth could support share price appreciation back to the initial July 2010 IPO price level of $36 by year end 2015 (+50% from current levels). Recent developments tied to the Affordable Care Act and the company's massive distribution expansion support the EBITDA growth outlook through 2015. We slightly raise our 2014/2015 EBITDA estimates to $123/$135 million from $121/$133 million and our EPS estimates to $1.35/$1.45 from $1.30/$1.40. As a byproduct of our forecasted +12% EBITDA CAGR over the 2013-2015 period we expect multiple expansion. We update our target valuation methodology from 8x trailing EBITDA to 10x forward EBITDA. Our updated valuation methodology remains well below where direct competitor NTSP was acquired at 13.9x EBITDA and is in-line with the median 10.2x multiple for 13 precedent takeout transactions in the space.”Green Dot Corporation closed on Friday at $22.96.