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Marqeta Posts Mixed Q4 Results; Shares Gain Pre-Market
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Marqeta Posts Mixed Q4 Results; Shares Gain Pre-Market

Shares of Marqeta, Inc. (NASDAQ: MQ) rallied 13.3% in Wednesday’s extended trading session and a further 12% at the time of writing on mixed fourth-quarter financial results. The company is a global modern card issuing platform that provides payment services to customers by creating customized and innovative payment cards.

Revenues jumped 76% year-over-year to $155.4 million and exceeded consensus estimates of $137.8 million. The increase in revenues reflected a surge in total processing volume (TPV) from existing large customers, which increased 76% to $33 billion.

Adjusted loss of $0.07 per share came in line with analysts’ expectations. The company had reported a loss of $0.11 per share in the same quarter last year.

Meanwhile, gross margins declined 800 bps to 49% during the quarter, attributable to higher card networks fees.

For 2021, the company reported net revenue of $517.2 million, up 78% year-over-year. Also, Marqeta’s net loss increased 244% year-over-year to $164 million.

Marqeta CEO Jason Gardner said, “Our modern card issuing platform can support cutting edge innovation at massive scale, and our fourth quarter and full-year 2021 results demonstrate that, both in the caliber of new customers we’re attracting to our platform and the growth of our existing customers globally.”

Outlook

For the first quarter of 2022, the company expects revenues to grow between 48% and 50%. However, it anticipates a negative adjusted EBITDA margin of between 8% and 9%.

Stock Rating

Following the fourth-quarter results, Mizuho Securities analyst Dan Dolev reiterated a Buy rating on the stock with a price target of $17 (58.7% upside potential).

Dolev said, “Results were “marqedly” strong, with better-than-expected revenue, GP and 1Q guidance. In particular, 4Q saw yet another notable decline in SQ sales concentration, strength across non-SQ verticals like BNPL, and fresh partnerships with Plaid and Citi, which helps MQ diversify away from the dependence on debit cards, positioning it well in the new world of real time account to account payments.”

Overall, the stock has a Moderate Buy consensus rating based on 5 Buys, 3 Holds and 1 Sell. The Marqeta stock price prediction of $20 implies 86.71% upside potential from current levels.

Hedge Funds Trading Activity

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in Marqeta is currently Very Negative, as the cumulative change in holdings across all nine hedge funds that were active in the last quarter was a decrease of 15.4 million shares.

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