Wolfe Research upgraded Marqeta to Outperform from Peer Perform with a $5.50 price target. The allays believes the market is underappreciating Marqeta’s business at current share levels. While some investors may be sidelined pending near-term uncertainties, at this price, the events can serve as catalysts "for clarity and upside" during 2023, the analyst tells investors in a research note. The firm sees Marqeta’s roughly $2.50 of net cash per share limiting downside to 30% versus upside potential of nearly 60% even post-Square renewal. Importantly, the company was nearly free cash flow break-even last year, and "multiple avenues" such as credit and embedded finance can drive longer-term growth along with a higher margin profile, contends Wolfe. The firm sees a compelling risk/reward at current share levels.
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