Roller coasters are something of a Marmite proposition - you either
love them or you hate them - and so too with roller coaster stocks like Green Dot (NYSE:GDOT).
The basic concept of prepaid reloadable debit cards is a sound one and
one that offers good access to the sizable unbanked/under-banked market,
but I'm not sure that the company has the marketing and product power
to withstand significant competition from the likes of American Express (NYSE:AXP) and Western Union (NYSE:WU).
The prospects of a contract renewal with Walmart (NYSE:WMT)
could loom over this stock for most of the next year, and the
unpredictability of the impact of the company's business development
spending adds another variable to the mix. I believe the stock appears
undervalued on even modest free cash flow growth assumptions, but
investors have to ask themselves if they want to take on the elevated
risks.
Read more here:
The Green Dot Roller Coaster Rolls On
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