Widespread Digital Payments Will Open New Global Markets

Key Takeaways

• Marqeta's rapid European growth, tech integration, and legacy migrations could trigger accelerated revenue, margin expansion, and increased high-margin gross profit globally.
  
• Its API-first platform, AI-powered offerings, and leadership in digital payments position Marqeta as a foundational, high-growth fintech for emerging payment trends and embedded finance.
  
• Over-reliance on key customers, margin compression from fee pressures, and commoditization risks threaten profitability, while regulatory barriers and high costs hinder international expansion and earnings growth.

Catalysts

Operates a cloud-based open API platform for card issuing and transaction processing services.

• Analyst consensus expects European expansion and TransactPay integration to accelerate growth, but these views may understate the magnitude; with Marqeta already demonstrating 100%+ TPV growth in Europe and rapid, multi-country platform launches like Bitpanda, a step-change in international revenue and margin acceleration is possible as Marqeta becomes the default modern issuer processor in key global markets.
  
• While analysts broadly agree that streamlined migrations and platform onboarding will drive higher revenues, these effects could prove even more powerful, as Marqeta's unique ability to rapidly migrate established programs unlocks pent-up demand from legacy financial brands and large enterprises, potentially triggering an outsized shift of multi-billion dollar card portfolios to Marqeta over the next several years, expanding high-margin gross profit at a faster-than-anticipated rate.
  
• Growing demand for programmable, real-time payments and embedded finance among non-financial brands uniquely positions Marqeta's API-first infrastructure for exponential usage and contract wins, as legacy processors cannot meet the flexibility and speed required by global e-commerce, retail, and technology players-suggesting a sustained, compounding impact on total processing volume and long-term earnings.
  
• The company's pioneering move into AI-powered products (including Agentic commerce, dynamic rewards, and risk/fraud management) could drive an entirely new category of higher-margin, value-added revenue streams-transforming Marqeta into a SaaS-like fintech leader with durable net margin upside.
  
• Early leadership in crypto-linked and stablecoin payment solutions, as evidenced by the high-velocity Bitpanda launch, positions Marqeta as the go-to partner for next-generation digital wallet and stablecoin card infrastructure, opening massive new addressable markets and supporting premium pricing and earnings expansion as stablecoin payments move into mainstream adoption.

Marqeta Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Marqeta compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Marqeta's revenue will grow by 23.2% annually over the next 3 years.
• The bullish analysts assume that profit margins will shrink from 10.4% today to 8.6% in 3 years time.
• The bullish analysts expect earnings to reach $84.5 million (and earnings per share of $0.16) by about July 2028, up from $55.1 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 38.2x on those 2028 earnings, down from 49.7x today. This future PE is greater than the current PE for the US Diversified Financial industry at 17.5x.
• Analysts expect the number of shares outstanding to decline by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.05%, as per the Simply Wall St company report.

Marqeta Future Earnings Per Share Growth

Risks

• Marqeta remains heavily dependent on a small number of major customers, particularly Block, which continues to contribute 45% of net revenue; the loss, renegotiation, or weakening performance of one of these partners, or increased pricing concessions as seen in recent renewals, could lead to significant and rapid declines in both revenue and gross profit.
  
• Market-wide pressure to lower payment processing fees-driven by regulatory initiatives or competition-threatens Marqeta's ability to maintain current unit economics as take rates have already declined; this could compress gross margins and EBITDA margins over the long term.
  
• Increasing corporatization and internalization of payments technology by large enterprises, combined with a proliferation of open-source or white-label payments solutions, may cause Marqeta's offering to become commoditized, reducing the company's pricing power and eroding both revenue growth and profitability.
  
• Persistent and potentially rising regulatory and data localization barriers across key international markets, especially in Europe, present ongoing compliance and operational cost risks that could limit Marqeta's ability to scale internationally, negatively impacting long-term top-line growth and profit margins.
  
• High research and development as well as go-to-market expenses are required to keep up with rapid technological change and evolving customer demands, and recent guidance suggests that net margins and adjusted EBITDA may remain subdued if operating leverage improvements stall, thereby delaying or diminishing sustainable earnings growth.

Valuation

• The assumed bullish price target for Marqeta is $7.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Marqeta's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $7.0, and the most bearish reporting a price target of just $5.0.
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $987.0 million, earnings will come to $84.5 million, and it would be trading on a PE ratio of 38.2x, assuming you use a discount rate of 7.1%.
• Given the current share price of $5.85, the bullish analyst price target of $7.0 is 16.4% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.