Marqeta (MQ) AI Stock Analysis

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Marqeta

(NASDAQ:MQ)

Rating:71Outperform

Price Target:

$5.50

▲(2.42%Upside)

Marqeta's overall score reflects its strong growth potential and strategic positioning in the embedded finance market. Financial performance shows solid revenue growth but challenges in profitability. Technical indicators suggest strong momentum, although caution is advised due to overbought conditions. The earnings call provided positive outlooks, while the CEO transition is viewed as a strategic move. Valuation concerns due to a high P/E ratio are noted, but they are outweighed by growth prospects and strategic initiatives.

Positive Factors

Financial Performance

Net revenue rose 18%, benefiting from a more favorable business mix.

Partnerships

Marqeta announced a partnership that will enable its customers to access American Express, which could help bring low-cost deposits and enhance its offerings.

Strategic Initiatives

The acquisition of TransactPay is seen as a positive move to accelerate capabilities and simplify customer experiences in Europe.

Negative Factors

Investor Confidence

Various factors are complicating year-over-year comparisons at Marqeta, leading to limited visibility and expected cautious investor behavior.

Operational Challenges

Launch delays and select customers moving services in-house have pressured the company’s revenue and gross profit growth.

Regulatory Environment

Regulatory pressures are moderating but remain a headwind, impacting stock performance due to delays in new card program launches.

Marqeta (MQ) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$2.51B

Dividend YieldN/A

Average Volume (3M)7.94M

Price to Earnings (P/E)53.5

Beta (1Y)0.53

Revenue Growth-8.44%

EPS GrowthN/A

CountryUS

Employees854

SectorTechnology

Sector Strength81

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)-0.02

Shares Outstanding434,975,920

10 Day Avg. Volume9,282,693

30 Day Avg. Volume7,936,383

Financial Highlights & Ratios

PEG Ratio0.93

Price to Book (P/B)2.14

Price to Sales (P/S)0.00

P/FCF Ratio58.56

Enterprise Value/Market Cap0.50

Enterprise Value/Revenue0.61

Enterprise Value/Gross Profit5.13

Enterprise Value/Ebitda-4.27

Forecast

1Y Price Target

$5.06

Price Target Upside-5.77% Downside

Rating ConsensusHold

Number of Analyst Covering10

Marqeta Business Overview & Revenue Model

Company DescriptionMarqeta, Inc. operates a cloud-based open application programming interface platform that delivers card issuing and transaction processing services to developers, technical product managers, and visionary entrepreneurs. It offers its solutions in various verticals, including commerce disruptors, digital banks, tech giants, and financial institutions. As of December 31, 2021, the company had approximately 200 customers. Marqeta, Inc. was incorporated in 2010 and is headquartered in Oakland, California.

How the Company Makes MoneyMarqeta makes money through its card issuing and processing services. The company generates revenue from interchange fees, which are small fees collected from merchants each time a payment card transaction is processed using Marqeta's platform. Additionally, Marqeta charges its clients for various services including setup fees, card production, and account management. The company also benefits from significant partnerships with major financial institutions and technology firms, further driving its revenue through collaborative ventures and expanded service offerings.

Marqeta Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Highlights revenue from different business segments, providing insight into which areas are driving growth and how diversified the company’s income streams are.

Chart InsightsMarqeta's 'Platform Services' revenue experienced a significant dip in late 2023 but is showing a steady recovery into 2025. The earnings call highlights strong growth in total processing volume and European expansion, which are likely contributing to this rebound. However, challenges such as the termination of the Varo deal and a renegotiated partner agreement could temper growth. Despite these hurdles, Marqeta's strategic achievements and efficiency improvements are expected to sustain positive momentum, with anticipated revenue growth of 13% to 15% for the full year.

Data provided by:

Main Street Data

Marqeta Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 31.30%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Positive

The earnings call highlights strong TPV and revenue growth, successful program migrations, and expansion in Europe. However, the termination of the Varo deal and revenue impact from a renegotiated partner agreement present challenges. Ultimately, the positive aspects, such as significant growth metrics and strategic achievements, outweigh the lowlights.

Q1-2025 Updates

Positive Updates

Strong Total Processing Volume (TPV) Growth

TPV reached $84 billion in Q1, marking a 27% increase compared to the same quarter in 2024, despite a one-point growth headwind due to the leap year.

Net Revenue and Gross Profit Increase

Q1 net revenue of $139 million grew 18% year-over-year, and gross profit increased by 17% to $99 million, resulting in a gross margin of 71%.

Adjusted EBITDA Achievement

Adjusted EBITDA was $20 million in Q1, translating into a 14% margin, driven by gross profit growth and operating expense efficiency.

European Expansion

Significant growth in Europe with over 100% TPV growth in Q1, supported by the potential acquisition of TransactPay by Q3 end to enhance program management offerings.

Successful Migrations

Completed migrations for Klarna, Perpay, and Bitpanda, demonstrating capability in migrating complex programs efficiently.

Negative Updates

Termination of Varo Deal

The planned migration of Varo's program will no longer take place as Varo focuses on existing products, affecting anticipated growth in the second half of the year.

Revenue Impact from Platform Partner Agreement

Renegotiated a platform partner agreement that reduced net revenue growth by three points in Q1 due to reduced pricing, although it did not impact gross profit.

Company Guidance

During the call, Marqeta provided detailed guidance on their financial expectations for the second quarter and full year of 2025. For Q2, they anticipate net revenue growth between 11% and 13%, with gross profit growth expected to be in the range of 23% to 25%, influenced by an incentive accounting change. Adjusted EBITDA margin is projected to be between 10% and 11%. For the full year, they expect net revenue growth between 13% and 15%, despite a renegotiated platform partner agreement impacting revenue representation without affecting gross profit. Gross profit growth is expected to remain between 14% and 16%, with adjusted EBITDA margin revised upwards to 10% to 11% due to lower expenses and efficiency improvements. The company highlighted a strong start to 2025, with Q1 total processing volume reaching $84 billion, a 27% year-over-year increase, alongside an 18% growth in net revenue and a 17% increase in gross profit.

Marqeta Financial Statement Overview

Summary

Marqeta shows a mixed financial performance. While the company has improved its net income position to a profit and maintains a strong equity ratio, its operational efficiency is challenged by negative EBIT margins. The cash flow position is stable, yet revenue fluctuations pose potential risks.

Income Statement

Positive

Marqeta shows a mixed performance in its income statement. The company achieved a gross profit margin of approximately 69.4% in 2024, demonstrating strong revenue efficiency. However, the net profit margin is approximately 5.38%, indicating modest profitability amidst past losses. Despite a reduction in revenue from the previous year, the company has significantly improved its net income position from a loss to a profit, which is a positive trajectory. Nevertheless, the EBIT margin is negative, reflecting challenges in operational efficiency.

Balance Sheet

Positive

Marqeta's balance sheet is strong, with a healthy equity ratio of 74.2% in 2024, indicating high financial stability and low reliance on debt. The debt-to-equity ratio is very low at 0.0008, suggesting minimal financial leverage. Return on equity is modest at 2.51%, showing limited efficiency in generating returns from shareholders' equity. Overall, the balance sheet reflects a robust financial position with substantial equity backing.

Cash Flow

Neutral

The cash flow statement for Marqeta reveals a positive trend in operating cash flow and free cash flow, with a significant improvement from previous losses. The free cash flow to net income ratio shows efficient cash conversion. However, the free cash flow growth rate from 2023 to 2024 was negative due to a decline in revenue, which impacts the overall cash flow strength. Despite this, the company maintains a strong liquidity position.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
507.00M	676.17M	748.21M	517.17M	290.29M
	Gross Profit
351.85M	329.51M	320.00M	231.71M	117.91M
	EBIT
-24.47M	-283.01M	-209.81M	-162.01M	-47.09M
	EBITDA
-7.01M	-272.27M	-205.96M	-158.47M	-43.59M
	Net Income Common Stockholders
27.29M	-222.96M	-184.78M	-163.93M	-47.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.10B	1.25B	1.62B	1.70B	370.34M
	Total Assets
1.46B	1.59B	1.77B	1.83B	457.68M
	Total Debt
13.22M	16.93M	12.43M	12.43M	18.22M
	Net Debt
-909.80M	-964.05M	-1.17B	-1.24B	-202.21M
	Total Liabilities
378.19M	346.30M	297.39M	256.95M	169.52M
	Stockholders Equity
1.09B	1.24B	1.47B	1.57B	288.16M
Cash Flow		Free Cash Flow
55.75M	8.45M	-16.89M	52.60M	47.90M
	Operating Cash Flow
58.17M	21.10M	-12.97M	55.35M	50.27M
	Investing Cash Flow
70.79M	38.52M	28.72M	-329.12M	-57.56M
	Financing Cash Flow
-186.91M	-261.79M	-79.49M	1.30B	167.38M

Marqeta Technical Analysis

Technical Analysis Sentiment

Positive

Last Price5.37

Price Trends

50DMA

4.34

Positive

100DMA

4.10

Positive

200DMA

4.38

Positive

Market Momentum

MACD

0.32

Negative

RSI

75.39

Negative

STOCH

88.31

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MQ, the sentiment is Positive. The current price of 5.37 is above the 20-day moving average (MA) of 4.75, above the 50-day MA of 4.34, and above the 200-day MA of 4.38, indicating a bullish trend. The MACD of 0.32 indicates Negative momentum. The RSI at 75.39 is Negative, neither overbought nor oversold. The STOCH value of 88.31 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MQ.

Marqeta Risk Analysis

Marqeta disclosed 47 risk factors in its most recent earnings report. Marqeta reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 1 New Risks

Issues relating to our use of AI technologies, including generative and agentic AI, combined with an uncertain legal and regulatory environment, could materially and adversely affect our business, financial condition, and results of operations. Q4, 2024

Marqeta Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATEN	74 Outperform	$1.26B	26.19	24.36%	1.40%	4.90%	9.91%
MQ	71 Outperform	$2.51B	53.54	5.01%	―	-8.44%	―
PAYO	70 Outperform	$2.47B	22.84	15.97%	―	14.86%	-0.94%
AVPT	65 Neutral	$3.76B	―	-8.39%	―	21.70%	-67.95%
BASE	65 Neutral	$981.38M	―	-57.86%	―	16.35%	14.27%
Sector *	61 Neutral	$11.48B	10.48	-6.95%	2.94%	7.54%	-9.55%
DOCN	59 Neutral	$2.54B	25.57	-41.63%	―	13.21%	109.61%

* Technology Sector Average

Performance Comparison

Marqeta

5.37

0.05

0.94%

ATEN

A10 Networks

17.16

2.23

14.94%

AVPT

AvePoint

18.50

9.48

105.10%

PAYO

Payoneer

6.83

0.84

14.02%

DOCN

DigitalOcean Holdings

27.92

-9.13

-24.64%

BASE

Couchbase

18.18

-4.49

-19.81%

Marqeta Corporate Events

Executive/Board ChangesShareholder Meetings

Marqeta Appoints New Board Members on April 18

Neutral

Apr 16, 2025

On April 10, 2025, Marqeta, Inc. announced the upcoming resignation of two board members, Godfrey Sullivan and Helen Riley, effective as of the Annual Meeting on June 12, 2025. Both resignations are not due to any disagreements with the company, and the board expressed gratitude for their years of service. Subsequently, on April 18, 2025, the board appointed Wendy Thomas and Elaine Paul as new members, with both joining the Audit Committee. Ms. Paul will also serve on the Nomination and Governance Committee, while Ms. Thomas will join the Payments Innovation Committee. There are no conflicts of interest or prior transactions involving the new appointees that require disclosure.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.