What happened
The share price of Marqeta (MQ 0.48%) was moving lower today on what was a rocky day for the markets. The fintech had fallen 8.9% at 2:42 p.m. EDT on Wednesday and was off about 7.5% at 3:15 p.m. EDT.
The markets were lower across the board on Wednesday as the Dow Jones Industrial Average had fallen 1.6%, the S&P 500 was down 1.7%, and the Nasdaq was 2.1% lower as of 3:15 p.m. EDT.
So what
Marqeta, which provides the digital infrastructure for payment cards, fell with the rest of the market, as investors were skittish over the undecided U.S. elections, where control of the Senate and House remain unknown.
What might have also generated some headwinds for Marqeta was the less-than-stellar earnings report that Upstart Holdings (UPST 0.07%) issued Tuesday afternoon. Revenue was lower than anticipated and the loss per share was higher than expected. Furthermore, Upstart announced that it had to let 140 hourly workers go last week due to a decline in loan activity on its platform.
NASDAQ: MQ
Key Data Points
Also on Wednesday, Chris Brendler, an analyst at D.A. Davidson, initiated coverage of Marqeta with a neutral rating and a price target of $7.25 per share. That would be an increase of almost 15% from its current price.
Now what
Investors should be tuned in after market close today as Marqeta was scheduled to report third-quarter earnings at 4:30 p.m. EDT.
The company has been growing rapidly, with revenue up 53% and gross profit up 66% last quarter year over year. It still had a net loss, but it was better than anticipated and lower than the previous year. A couple of things to watch for are any updates on the process of replacing founder and CEO Jason Gardner, who announced in the second-quarter earnings call that he is stepping down as CEO. He will stay on as executive chairman of the board. Gardner said it was time for a new leader to take the company to the next level.
It will be interesting to see if the company has been able to maintain its growth through a difficult third quarter.
And watch for any news on the renewal of its contract with Block (SQ +6.77%), its largest client. The contract doesn't expire until the end of 2024, but it is worth monitoring. Lastly, since Block accounts for roughly two-thirds of Marqeta's revenue, investors should see where that concentration stands and if that percentage has dropped.
