Green Dot Corporation (NYSE:GDOT) Just Reported, And Analysts Assigned A US$9.75 Price Target

Green Dot Corporation (NYSE:GDOT) shareholders are probably feeling a little disappointed, since its shares fell 8.3% to US$7.65 in the week after its latest annual results. Revenue of US$1.7b came in 2.3% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of US$0.50, a 10% miss. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Green Dot

Taking into account the latest results, the current consensus from Green Dot's four analysts is for revenues of US$1.89b in 2025. This would reflect a solid 9.9% increase on its revenue over the past 12 months. Green Dot is also expected to turn profitable, with statutory earnings of US$0.12 per share. In the lead-up to this report, the analysts had been modelling revenues of US$1.88b and earnings per share (EPS) of US$0.50 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target fell 24% to US$9.75, with the analysts clearly linking lower forecast earnings to the performance of the stock price. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Green Dot, with the most bullish analyst valuing it at US$12.00 and the most bearish at US$7.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Green Dot's rate of growth is expected to accelerate meaningfully, with the forecast 9.9% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 7.1% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 11% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Green Dot is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Green Dot. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Green Dot analysts - going out to 2026, and you can see them free on our platform here.

We also provide an overview of the Green Dot Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.