Insights

Why Marqeta Stock Rocked the Market Today

What happened

Shares of fintech company Marqeta (NASDAQ: MQ) outperformed the broader stock market on Monday, rising to close the day nearly 5% higher against the slight decline of the S&P 500 index. A price target increase from an analyst tracking the stock was the catalyst for the day’s improvement.

So what

Early that morning, KeyBanc’s Josh Beck upped his target on the stock to $11 per share. While that was only $1 higher than his previous level, investors were encouraged that the prognosticator is maintaining his overweight (i.e., buy) recommendation on the fintech.

The reasoning behind Beck’s move wasn’t immediately clear, but he isn’t the only analyst getting marginally more bullish on Marqeta’s prospects. In mid-July, SMBC Nikko Securities’ Andrew Bauch made a similar increase, adding $2 to his price target for a new level of $10 per share. Unlike Beck, though, Bauch had an underperform (read:sell) recommendation on the shares, which was maintained through the price target hike.

Marqeta is a young and volatile stock, even by the general standards of the relatively young and volatile fintech sector. Its speed, creativity, and flexibility with its specialty — payment cards and related products — has won it business from top sector star Block (NYSE: SQ). Marqeta remains very dependent on the Block partnership, though, which has raised the concerns of investors, and despite some impressive revenue growth it is habitually loss-making on the bottom line.

Now what

Investors should never base their decisions on the moves of an analyst (or several). Besides, these recent price target lifts are fairly small-scale and shouldn’t be impactful on a long-term basis. Regardless, despite its disadvantages, Marqeta is an up-and-comer in the fintech world, and as such is certainly worth watching at the moment.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Block, Inc. The Motley Fool recommends Marqeta, Inc. The Motley Fool has a disclosure policy.

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