Welp, you hate to see it. Marqeta, the once-hot card-issuing platform that had Wall Street swooning, just got absolutely rekt after reporting an earnings miss and giving guidance that was about as exciting as a lukewarm cup of coffee. Shares tanked 36% after hours, leaving investors clutching their pearls and probably their retirement plans. Oooof.

(Source: CNBC) 

In short, this was a classic fall from grace fiasco, especially since Marqeta was already having a rough year—down 15% before this disaster of a report. But, things apparently just went from bad to "maybe I should delete this stock from my portfolio" levels of ugly. For instance, since peaking in 2021, Marqeta has lost more than 80% of its value. For those keeping score at home, that’s a faster drop than Diddy’s celebrity status, which almost feels like someone had drizzled some baby oil on that report to accelerate the plunge (too soon?). 

(Source: Youtube) 

So what exactly went wrong, you ask? Well, in Q3, the company reported $128 million in revenue, which, sure, sounds fine until you realize that Wall Street was expecting a whole $0.1 million more than that. As for the loss per share? 6 cents versus the expected 5 cents. And listen, we know a penny doesn’t seem like much, but in the world of earnings reports, it’s enough to send the stock price into a tailspin.

But the real kick in the gonads was none other than Marqueta’s guidance for Q4. The payment processing firm said revenue would increase 10-12% year-over-year, which again, sounds decent until you realize analysts were expecting 17% growth… *sigh*.

(Source: Yahoo Finance) 

The main reason for the lowered disappointing guidance came from the fact that Marqeta chalked it up to “heightened scrutiny of the banking environment” and some “specific customer program changes.” Translation: banks are being stingy, and Marqeta’s biggest clients aren’t spending like they used to. (Read: #5,897,840 banks are gunning for a Trump win). 

(Source: Giphy) 

To make matters worse, Marqeta’s grand plans to break into the buy now, pay later (BNPL) space with its new product, Marqeta Flex, haven’t exactly lit the world on fire. Sure, it’s supposed to let you use BNPL options with any Visa or Mastercard, but let’s be real—BNPL is already a crowded space, and given the fact Marqeta doesn’t have a “moat” that wildly differentiates themselves against competitors doesn’t exactly juice up the “edge”.

(Source: MorningStar) 

On the other hand though, despite the doom and gloom, Marqeta’s total processing volume (TPV) still managed to grow by 30%, hitting $74 billion. Net revenue saw an 18% bump, and gross profit was up 24%. So, it’s not all bad news, but here’s the thing: while TPV growth is solid, it doesn’t mean much when your revenue guidance is falling short. Plus, given the issue that Marqeta’s stock is now down more than 80% from it's all-time high, it’s going to take much more than this to turn things around fairly quickly. 

(Source: Giphy) 

Now with that said, Marqeta’s CEO, Simon Khalaf, tried to put a positive spin on things during the earnings call - mentioning that Marqeta is officially rolling out a new solution with Visa this week. Which is cutesy and demure, but will it be enough to stop the bleeding? My bets are no.

(Source: PYMTS) 

Sure, Marqeta might still have some long-term potential, especially as digital payments continue to grow. But after this earnings miss and brutal guidance, the stock is more like a sinking ship than a rocket to the moon right now. For investors? You might want to wait this one out or at least wait until Marqeta proves it can deliver on its lofty promises. Because right now, it’s looking more like a buy now, cry later situation.

In the end, do what you will with this information, and as always stay safe and stay frosty, friends! Until next time… 

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Stocks.News does not hold positions in any companies mentioned in the article.