World Stock Watch

Marqeta’s Stock Plummets After Disappointing Guidance

The payment processing firm Marqeta saw its stock tumble over 30% in extended trading on Monday after releasing weaker-than-expected guidance for the fourth quarter. This significant decline comes as a surprise, given the company’s relatively strong third-quarter results.

Third-Quarter Results: A Mixed Bag

While Marqeta’s third-quarter revenue and net income fell slightly short of Wall Street estimates, the company’s total processing volume still showed impressive growth, increasing by over 30% from the same period last year. Net revenue and gross profit also saw significant gains, rising 18% and 24%, respectively.

Fourth-Quarter Guidance Misses the Mark

However, it was Marqeta’s forecast for the current quarter that raised concerns. The company expects revenue to increase by only 10% to 12% from last year, falling short of analysts’ expectations of over 17% growth. Marqeta attributed this guidance miss to increased scrutiny of the banking environment and specific customer program changes.

Challenges Ahead

Marqeta’s struggles are not new; its stock has plummeted over 80% from its peak in 2021, the year it went public. The company has been working to expand its offerings, including its digital commerce business, which provides payment technology designed to detect fraud and ensure proper routing of funds. Marqeta has also launched a buy now, pay later product called Marqeta Flex, which brings BNPL capabilities to any credit card.

Breaking into the BNPL Market

Marqeta Flex aims to bring order to the BNPL space, which has seen rapid growth in recent years. According to CEO Simon Khalaf, the service provides an “orchestration layer” that ties together issuing, processing, disputes, and chargebacks, making it a more established and reliable option for consumers.

What’s Next for Marqeta?

As Marqeta works to regain its footing, investors will be watching closely to see how the company addresses its current challenges and continues to innovate in the payment processing space. With its stock down over 15% for the year prior to the report, Marqeta will need to make significant strides to regain investor confidence.