UPDATE: Compass Point Downgrades Green Dot Corporation to Neutral, Reiterates $26 PT on Valuation

In a report published Thursday, Compass Point analyst Douglas Greiner downgraded the rating on

from Buy to Neutral, but reiterated the $26.00 price target. In the report, Compass Point noted, “We downgrade our rating from Buy to Neutral on valuation as the shares have now appreciated to within 3% of our $26 price target. Since our 5/1/13 upgrade at $15.71 the shares have appreciated 61% compared to the S&P 500 return of 6.6%. Since the July 2012 low of approximately $9 the shares have appreciated nearly 200%. Our $26 price target equals 8.2x trailing Adjusted EBITDA (a base case takeout value considering 13 precedent transactions in the space). While shares may drift higher given the outlook for Adjusted EBITDA growth through 2015, assuming zero multiple expansion and our current valuation methodology, the potential growth-related upside is limited. Moreover, in our opinion, there are a number of unfavorable factors that may possibly disrupt either the core business or investor sentiment. Specifically, the company faces among other issues lingering competitive pressures, 65% Walmart revenue concentration, active card portfolio churn rates above 40%, high key personnel turnover (most recently at the CFO level), and increasing fraud controls (1.8 million accounts turned away over last twelve months).” Green Dot Corporation closed on Wednesday at $25.30.