Here's Why Green Dot Stock Is a Great Pick for Now

Green Dot GDOT is a pro-consumer bank holding company and personal banking provider that has performed extremely well over the past six months and has the potential to sustain momentum in the near term. If you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.

What Makes GDOT an Attractive Pick?

An Outperformer: A glimpse at the company’s price trend reveals that the stock has had an impressive run over the past six months. Shares of Green Dot have returned 19.2% compared with the industry’s 7.3% growth and the 5.5% rise of the Zacks S&P 500 composite.

Solid Zacks Rank and VGMScore: GDOT currently sports a Zacks Rank #1 (Strong Buy) and has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings Surprise History: GDOT has a decent earnings surprise history. The company outpaced the Zacks Consensus Estimate in two of the trailing four quarters and missed twice in the remaining, delivering an earnings surprise of 5.6%, on average.

Strong Growth Prospects: The Zacks Consensus Estimate for GDOT’s current-year earnings is pegged at $1.22, suggesting 9.9% growth in the past 60 days. Moreover, for the next year, earnings are expected to register a 10.8% increase in the same time frame.

Growth Factors: Green Dot's user-centric expansion efforts are commendable, as demonstrated by its new partnership with Samsung to enhance Samsung Wallet with “Tap to Transfer” functionality. This feature allows users to quickly send money to other digital wallets or contactless debit cards, improving convenience and cross-platform compatibility. Powered by Green Dot’s Arc platform, the partnership brings scalable, secure financial services to nearly 12 million U.S. users while maintaining strong protections through Samsung Knox and Green Dot’s banking infrastructure.

Green Dot’s growth strategy smartly balances direct-to-consumer products with its Banking-as-a-Service (BaaS) model. By powering financial products for major brands like Walmart, Uber and Apple, Green Dot gains access to large customer bases and generates steady revenues from interchange fees and deposits. Its asset-light balance sheet sets it apart from other BaaS providers, allowing for higher margins and less reliance on interest income. This efficient, scalable model gives Green Dot a strong and unique position in the embedded finance space.

Stocks to Consider

Some better-ranked stocks from the broader Zacks Business Services sector are Maximus MMS and AppLovin (APP)

Maximus carries a Zacks Rank of #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

MMS has an encouraging earnings surprise history, having outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once. The average beat is 20.1%.

AppLovin currently sports a Zacks Rank of 1.

APP has an encouraging earnings surprise history, outpacing the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 22.9%.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research