Down 70%, Is Marqeta, The Fintech Payment Processing Stock A Buy?


Marqeta Inc. (NASDAQ: $MQ) is a fintech company that has been down by about 70% from its peak since it went public during the summer of 2021.

Marqeta lets companies build custom payment solutions with their proprietary API and it takes a small percentage of every transaction that goes through its custom payment system.

The market capitalization of the company has gone down to $6 billion while achieving revenue of $450 million over the last 12 months. The company has $1.26 billion in cash and no debt.

Currently, Marqeta customer base is concentrated on Block (formerly Square) which provided 68% of the revenue. This customer concentration is a risk for Marqeta revenue that investors need to consider before investing. The customer base is getting more diversified through expansion, including Uber, Affirm, and others. Affirm grew transaction volume by 115% and Uber grew booking by 51% year over year in the most recent quarter.

Based on the diversification of the customer base we can expect the company to have more than 50% year-over-year revenue growth within the next few quarters.  The company may become profitable with low losses with a growing customer base within the next year as the EBITDA was only slightly negative, losing $5 million in the most quarterly earnings report.

In terms of valuation Marqeta still seems overvalued.

The EV/S, P/S and P/CF multipliers are still more than the industry average. The trailing 12-month gross profit margin is also lower than the industry average. The trailing 12-month EBITDA margin and net income margin are also still negative.

Yet in terms of revenue growth, scalability, and customer base expansion, Marqeta Inc. ($MQ) shows promise to be a good growth stock.


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