Here's Why You Should Hold On To Green Dot (GDOT) Stock
Zacks Investment Research | May 21, 2019 08:22AM ET
A prudent investment decision involves buying stocks that have solid prospects and selling those that carry risks. At times, it is rational to hold certain stocks that have enough potential but are weighed down by tough market conditions.
We believe Green Dot Corporation (NYSE:GDOT) is a stock that investors should retain in their portfolio. Accelerated investments in both products and platform parts of its business have dampened the company’s short-term prospects but bode well for the mid to long-term.
The stock, though down a massive 39.7% year to date, should recover when these investments start contributing to the company’s top and bottom lines.
Notably, Green Dot intends to invest an incremental $60 million this year in marketing new products and developing BaaS 3.0 and BaaS 4.0 technology platforms. This investment is expected to deliver incremental active accounts of more than one million and incremental revenues ranging between $200 million to $300 million by the end of 2019.
Let’s take a look at some other factors that bode well for Green Dot.
‘New Kind of Bank’
Green Dot’s long-term strategic plan to be a ‘New Kind of Bank’ is leading to impressive results. Under the plan, the company is focusing on the use of technology ubiquitous digital and retail brick-and-mortar distribution and large partnerships. It is trying to increase revenue contribution from rising customer satisfaction instead of rising customer penalty fees. These initiatives are expected to increase operating and financial momentum significantly, moving ahead.
Green Dot Corporation Revenue (TTM)
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