Citigroup: Green Dot's Good News May Be Priced In

After going about a consolidation move for much of 2016, Green Dot Corporation (NYSE: GDOT) shares took off strongly in 2017.

The Analyst

Citigroup analyst Ashwin Shirvaikar downgraded his rating on Green Dot from Buy to Neutral and upped his price target from $54 to $66.

The Thesis

Many of the factors that supported Citi's January upgrade of Green Dot have played out by now, making comparisons tougher in 2018, Shirvaikar said in a Monday note. (See Shirvaikar's track record here.)

Pointing to some recent wins, including from Uber, Apple Inc. (NASDAQ: AAPL) Pay Cash and Intuit Inc. (NASDAQ: INTU), analyst Shirvaikar said some of them have a slow revenue ramp and expenses loaded on the front end. 

Therefore, Shirvaikar expects fewer chances of material earnings beat-and-raise quarters that drove Green Dot's stock performance in 2017.

Given its view on ramp and costs, Citi adjusted its earnings per share estimates for 2018 slightly below the mid-point of its low and high scenario outcomes, which are at $2.35 per share and $2.61 per share, respectively.

"Clearly 2018-19 GDOT opportunities exist but they stem from less controllable factors and we are past the self-help phase," Shirvaikar said.

The Price Action

The shares of Green Dot have been up a whopping 171.1 percent year-to-date. 

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