Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified

Green Dot

(

GDOT

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Green Dot as such a stock due to the following factors:

  • GDOT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $30.6 million.
  • GDOT has traded 329,810 shares today.
  • GDOT is down 3.7% today.
  • GDOT was up 40.6% yesterday.

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More details on GDOT:

Green Dot Corporation, together with its subsidiaries, operates as a pro-consumer technology bank holding company that provides personal banking for the masses. GDOT has a PE ratio of 12. Currently there are 2 analysts that rate Green Dot a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for Green Dot has been 428,300 shares per day over the past 30 days. Green Dot has a market cap of $792.4 million and is part of the financial sector and financial services industry. The stock has a beta of 1.61 and a short float of 8.6% with 2.75 days to cover. Shares are up 5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Green Dot as a

hold

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 9.4%. Since the same quarter one year prior, revenues rose by 42.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • GDOT's debt-to-equity ratio is very low at 0.21 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.14, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for GREEN DOT CORP is currently very high, coming in at 74.80%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 17.96% trails the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Consumer Finance industry and the overall market, GREEN DOT CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • GDOT has underperformed the S&P 500 Index, declining 21.80% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

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