As an early-stage tech company, Marqeta is still posting high losses as it focuses on growing the business over generating profits. In the third quarter of 2022, its revenue increased 46% year over year to $192 million, and its net loss widened from $46 million to $53 million. However, it generates free cash flow, and it ended the quarter with $1.2 billion in cash and equivalents on the books, and no long-term debt. That puts it in a great position to make strategic moves such as its Power Finance acquisition.
There's risk with Marqeta as a young, unprofitable company. Most of its business is tied up in one partnering company: Block accounts for around 70% of its revenue right now. But it's adding clients and this latest acquisition will likely expand its business. Marqeta has a tremendous growth runway, and the current valuation is 6 times trailing 12-month sales. That suggests the stock looks cheap enough to buy.
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