Market Overview

Guggenheim Downgrades GreenSky After Underwhelming Q1, Says Positives Are Baked Into Stock

Guggenheim Downgrades GreenSky After Underwhelming Q1, Says Positives Are Baked Into Stock

GreenSky Inc (NASDAQ: GSKY) reported disappointing first-quarter revenue Tuesday on softer-than-expected transaction volumes.

Although the company’s underlying business momentum is good, it's already reflected in the stock following a rally year-to-date, according to Guggenheim Securities.

The Analyst

Jeff Cantwell downgraded GreenSky from Buy to Neutral and removed the prior price target.

The Thesis

GreenSky’s first-quarter total revenue of $104 million missed Guggenheim's forecast by 3 percent, while transaction volumes of $1.24 billion came in lower than the sell-side firm's $1.28-billion projection, Cantwell said in the Wednesday downgrade note. (See his track record here.) 

At $19 million, adjusted EBITDA beat Guggenheim's $18-million estimate, mainly due to lower FCR liability expense, the analyst said. 

GreenSky maintained its 2019 revenue guidance at $538-$572 million and its transaction volume forecast at $6.4-$6.8 billion.

Guggenheim lowered estimates for 2019 from the previous high end of the guidance range toward the mid-to-low end. The firm reduced its transaction volume and revenue estimates for 2019 from $6.8 billion to $6.5 billion and from $568 million to $549 million, respectively.

The EPS estimates for 2019 and 2020 have been lowered from 72 cents to 69 cents and from 96 cents to 90 cents, respectively.

“While we will continue to have a generally positive view of the company's strategy, competitive positioning, and ability to execute against management's stated objectives, we believe these elements are largely contemplated in the shares' current price,” Cantwell said.

Price Action

GreenSky’s stock has appreciated around 52 percent year-to-date. The stock was trading down 1.34 percent at $13.98 at the time of publication Wednesday. 

Related Links: 

American Express Impresses Analysts With International, Digital Strategies

71 Biggest Movers From Yesterday

Latest Ratings for GSKY

Nov 2020Morgan StanleyMaintainsEqual-Weight
Oct 2020Stephens & Co.Initiates Coverage OnUnderweight
Aug 2020Morgan StanleyMaintainsEqual-Weight

View More Analyst Ratings for GSKY
View the Latest Analyst Ratings


Related Articles (GSKY)

View Comments and Join the Discussion!

Posted-In: Guggenheim Securities Jeff CantwellAnalyst Color Earnings News Guidance Downgrades Analyst Ratings Best of Benzinga

Latest Ratings

UPLDCanaccord GenuityMaintains57.0
EJefferiesInitiates Coverage On
EQNRJefferiesInitiates Coverage On
HAEBarrington ResearchDowngrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at