Marqeta Inc. has recently received a significant boost in its stock value, surging 5.7% on Wall Street. BofA analyst Cassie Chan has upgraded Marqeta’s stock from neutral to buy, citing the company’s impressive financials and the potential for lucrative opportunities that could lead to a 20% growth in the medium term.
One noteworthy aspect of Marqeta’s prospects is the high number of renewed deals with its customers, accounting for 75% of its total payment volume between Q2 2022 and Q3 2023. Additionally, several prominent clients such as Block Inc., DoorDash Inc., and Affirm Holdings Inc. are expected to generate revenue growth ranging from 15% to 20% over the next two years.
Marqeta aims to revolutionize card issuance processes and has partnered with Block on the Cash Card debit card tied to Cash App. Moreover, Marqeta collaborates with companies that require specialized card solutions, like DoorDash, ensuring that workers shopping on behalf of customers can conveniently pay for the ordered items without any complications.
Although Marqeta has primarily focused on debit cards, Chan sees an opportunity for the company to expand into the credit sector. However, she believes that analysts have not fully accounted for this potential in their estimates for 2025 and 2026.
The recent introduction of the Sunwest Visionary Card further exemplifies Marqeta’s ability to form successful alliances with banks and excel in the commercial card market.
Despite a decline of more than 12% in Marqeta’s shares this year, Chan considers the recent weakness in their value to be exaggerated. She has set a price objective of $7, which is 15% higher than Monday’s closing price, and an impressive 21% above Friday’s closing price before the stock saw a rally following the upgrade.