Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Green Dot (NYSE:GDOT), a money management solutions company known for its prepaid debit cards and payment transfer solutions, charged higher by as much as 12% after reporting better-than-expected first-quarter results.
So what: For the quarter, Green Dot saw revenue rise 8% to $155.8 million and GAAP EPS hit $0.42 as cash transfers jumped 11% and prepaid debit card active users fell 4%. Wall Street forecasts had only been calling for revenue of $141.4 million and EPS of $0.37. Furthermore, Green Dot offered guidance that was well-received by investors. For fiscal 2013, Green Dot is forecasting EPS of $0.95-$1.20 on revenue of $525 million to $550 million, which is actually up from the company's own previous forecast of $510 million to $540 million. Current estimates had been calling for EPS of $1.15 on $540.8 million in revenue.
Now what: Green Dot is a company I've been touting for a while that gets absolutely no respect. I'm a bit concerned that its prepaid active accounts dropped by 4%, but I attribute that to the fact that many of its prepaid accounts were intricately tied to Wal-Mart, and with increasing competition on that front, there are bound to be hiccups. As Green Dot expands its customer base and its cash solutions for consumers it should be able to generate steady mid-to-high single-digit growth in my opinion. It's definitely a company I'd suggest digging a bit deeper into.
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