Equity Research

Marqeta, Inc.: Initiation of Research Coverage

William Blair initiated research coverage of Marqeta, Inc. (MQ $28.10). Marqeta provides a cloud-based, open API card issuing and processing platform. In addition, Marqeta provides an expanding number of applications, such as program administration tools, fraud prevention services, data insights, and developer tools.

Analysts Bob Napoli and Cris Kennedy estimated the company would generate revenue growth of 46% in 2021 and 32% in 2022. Marqeta grew revenue at a 107% compound annual rate from 2017 to 2020, and the analysts anticipate a 30% CAGR from 2021 to 2023.

“Marqeta is bringing innovation to—and disrupting—the global payments market,” Napoli said. “Marqeta’s modern platform uniquely uses open APIs to enable developers to efficiently create and implement customized, innovative solutions that meet business-differentiated and evolving use-cases. While Marqeta continues to diversify, it targets several key verticals, which include on-demand delivery, alternative lending, expense management, digital remittances/disbursement, and digital banks. Collectively, transaction volume in those markets is estimated to grow at a 23% compound annual clip to reach $4.8 trillion by 2023.”

Kennedy added, “In addition to growing with its customers and long-term secular tailwinds, Marqeta has multiple growth drivers, including adding new logos, expanding its service offerings, and expanding into new verticals and geographies. Marqeta has less than 1% share of the $6.7 trillion U.S. card market and has a smaller share of the $23 trillion international card market—expanding outside the United States remains a massive growth opportunity. Acquisitions could also help expand the company’s total addressable market, drive growth, and/or expand margins.”

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Current Ratings Distribution (as of 7/5/21)

Coverage Universe
Outperform (Buy): 76%
Market Perform (Hold): 23%
Underperform (Sell): 1%

Inv. Banking Relationships*
Outperform (Buy): 28%
Market Perform (Hold): 11%
Underperform (Sell): 0%

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