Deutsche Bank Believes Green Dot Could Be Affected By NetSpend Concerns

In a report published Wednesday, Deutsche Bank analyst Ashish Sabadra reiterated a Hold rating and $21.00 price target on Green Dot Corporation (NYSE: GDOT).

In the report, Deutsche Bank noted, “On its earnings call today after the close, TSS announced the rollout of NetSpend prepaid card at all the Walmart locations in the US by end of November. We believe the increased competition could impact GDOT FY15 revenues; however, additional information on NetSpend's prepaid card fees and product placement should provide more clarity on the risk from the competitive product. WMT had introduced AXP's Bluebird in Oct 2012 and the Serve card in August 2014. The increased competition along with the higher compliance costs have weighed on GDOTs growth at WMT. GDOT revenues at WMT declined double-digit to 55% of total revenues in 2Q14 from 65% of revenues in 2Q13 (GDOT attributed the decline in increased usage of fee waiver plan). In addition, WMT lowered the MoneyCard fees which could negatively impact revenues but bolster card sales. Launch of GoBank distribution at WMT helps strengthen relationship but we do not anticipate material contribution to revenues in FY15. In addition, discontinuation of the MoneyPak product starting 2015 could also weigh on the revenue growth.”

Green Dot Corporation closed on Tuesday at $22.04.