Marqeta: A Recent Fintech IPO Worth Considering (NASDAQ:MQ)

When the tide rolls out, it can reveal some beautiful seashells

I can’t think of many positive things to write about concerning the great re-rating of the past several months. I have gotten email from some subscribers to the effect that the re-rating has had the impact of postponing their retirement plans. At my age, that isn’t much of a consideration given that I should already be retired, but find what I do to intellectually stimulating. Nonetheless, I can’t describe the last 5 months or so as anything other than a painful episode. There have been some signs that the worst of the damage from the re-rating has come to an end, but certainly market participants are still very focused on inflation, and the likelihood of some number of rate increases and what is now called quantitative tightening.

I can’t think of too many positive elements to be said about Russia’s barbarous aggression and destruction in the Ukraine. I suppose it has served as a wake-up call to western European polities and perhaps this country that the lack of spending on both fossil fuel exploitation, nuclear power and on defense have been wrong-headed policies. But the threat to world stability, the suffering of the Ukrainians, and the potential economic dislocations and uncertainties are hardly worth the loss of life and the destruction of a country.

This not an article geopolitical issues, or about inflation, or even the most recent stock market rally. I am going to review one of the most recent fintech IPO’s whose valuation has been shredded along with most other high-growth, high valuation names, Marqeta (NASDAQ:MQ). The fintech space these last several months has been getting a bad rap from investors. There are, or so it appears to me, a clutch of analysts at some brokerage companies whose mind set, to coin a word, is Ludditerian. I don’t suspect that Ludditerian is going to make into spell-check dictionaries any time soon. Marqeta is a technology company, but its technology is masked by the fact that it does issue credit cards. It is not in the credit business, for better or worse.

Marqeta is a company with a profile somewhat similar to that of Twilio (TWLO). Its software consists of application programming interfaces (APIs) that developers use to create applications. In this case, the applications that are created are focused on issuing cards and processing transactions initiated on those cards. It has a rather significant customer concentration with Square/Block (SQ) but its base is growing rapidly and its revenue streams are diversifying.

Marqeta has a strong presence in the Buy Now/Pay Later space. Its clients include Affirm (AFRM), Klarna, Sezzle and of course Afterpay which recently was acquired by Block. Because of the acquisition, it seems probable that Marqeta’s revenue concentration with Square will not fall further this year, although, of course that is at least as much a function of the new customers Marqeta is going to bring on-board and their revenue ramp as well as the potential growth of Afterpay now that it is part of Block.

Marqeta’s services have also been acquired by many neo-banks/digital banking services, and even by some old-line FI’s who are in the process of broadening their product lines in order to better compete in the emerging market for financial services.

Marqeta reported its Q4 earnings earlier this month. The results were a substantial upside with revenue growth of 76%, gross profit growth of 108% and with the company actually reaching EBITDA profitability for the quarter. The revenue beat last quarter, compared to the company’s prior forecast was around 15%, and about 45% of the incremental revenue fell to the bottom line. The company announced a significant transaction with Citi Commercial Card (C). The company’s forecast was an upside compared to prior expectations, although the company is still forecasting negative adjusted EBITDA for the full year of 2022.

The shares did manage to react positively in the wake of the earnings release, but then in the panic that followed, they made new lows for the year, before bouncing about 20% in the most recent rally. That said, MQ shares have lost 37% of their value since the start of the year, and they are down by more than 70% since their November high point.

One thing that the re-rating has accomplished, is to create what I consider to be investible valuations for some company’s whose prior share prices were simply too high for my valuation process. I suppose that might be considered a good thing in some ways, and there will be those who believe that valuations have returned to more realistic levels. This not a place to explore than controversy. But it is my opinion, that after a drop of more than 70%, coupled with growth in both revenues and margins far greater than previously anticipated, Marqeta shares now make sense as an investment.

Marqeta is not a company without controversy. This a company with lots of customer concentration, and last quarter 63% of the company’s revenues came from its largest customer, Block. That is down from 68% the prior quarter, and 72% the immediately preceding quarter, but still an elevated percentage. Block is not the worst customer to have, and its spend with Marqeta is growing quite rapidly, but of course, the relationship is the subject of concern. The growth of the non-top 5 customer cohort was greater than 200% last quarter, while the growth of its top 5 customers in the quarter was greater than 50%. Overall, the company DBE rate was 175%.

But the fact is that Marqeta has other users beyond its top 5 with truly stunning growth rates. I will review some of Marqeta’s customers later on this article, but suffice to say that the growth from these customers is at exceptional rates.

Given the growth the company is experiencing, the market structure and the company’s competitive position, and indications that the company’s unit economics are quite favorable, I believe that valuations are reasonable for investors and the shares are well worth buying in a high-growth IT portfolio. Fintech valuations in general, for a variety of reasons, have seen more than average valuation compression since the start of the rerating process. Much of the valuation compression is the result of concerns about interest rates, default possibilities, and the outlook for the overall economy. That said, as mentioned above, Marqeta is not in the credit business and it is in the business of providing developers tools that are used to create modern applications that are necessary to maintain the relevance of both legacy and new fintech operators.

Two things to make clear. Marqeta shares are not going to perform well consistently until the market sustainably pivots to rewarding growth. I maintain various valuation screens. On March 13, my plot of the correlation between growth and valuation fell to 28.5%. That is about half of the historic average for that metric and obviously reflects fears of the geopolitical environment as well as concerns about valuation in the wake of an expected series of Fed rate hikes. It has bounced in the last several days with the market rally concentrated in high growth names. As of today, March 24, 2022, that metric sits at just below 36.5%.

I further note that Marqeta is not a SaaS company. It doesn’t get revenue from either seats or specific software consumption. Instead, its revenues are based on GMV and a take rate. Over any extended time frame, that is an excellent business model and I have recommended loads of different vendors whose revenues are tied to GMV. Indeed, currently, Affirm, whose shares I recommend, as well as Shift4 (FOUR) another recommendation, have revenue models which are tied to their growth in GMV.

There is a concern these days about the price spikes in energy and food leading to a recession. It is not a concern that can be ignored, but I believe a concern that should be noted as just that at this point. The company, in its latest call said that GMV had performed well in February, and of course Affirm has preannounced an upside of some magnitude in its GMV metric for this quarter while Block’s earnings release was also felt to be positive.

What does Marqeta do?

Marqeta is probably not a name on the lips of many subscribers/readers. It is a company in the fintech space whose IPO was held on June 8, 2022. The shares went public at $27, and rose to as high as $38 in mid-November when the company reported results. They fell to just under $10 earlier this month and have rallied a bit, because of the overall market rally.

Marqeta is a card issuing platform. That probably doesn’t sound greatly exciting. After all, how difficult can it be to issue a credit or debit card? But that really doesn’t quite encompass the value the Marqeta provides to its customers. Marqeta actually has a set of tools that developers who work with other fintech companies use to create their unique systems for card issuance and payments.

At this point, Marqeta’s principal verticals are in digital banking, BN/PL, On-Demand Delivery (that is one of the services that is offered by Square and which uses Marqeta to issue cards and process payments) and expense management. The largest vertical is apparently digital banking, which is umbrella category for many services that require both physical and virtual cards. Readers who have used the Cash App from Square and have a card connected to that account, have gotten their card based on Marqeta technology and it has been the explosive growth of the Cash App that enabled Marqeta to scale as rapidly as it has, and it is a significant reason for Marqeta’s customer concentration. Lydia is the equivalent app in Europe and is based in France. It is a Marqeta customer.

The company’s API’s do indeed allow developers to write software that enables fintech firms to issue physical, virtual and tokenized cards. (A tokenized card for all of us non-tech folks, is one in which the sensitive information is encrypted so instead of readable data, the card only has a meaningless string of numbers and letters that are useless to a hacker. Many of the digital payments wallets such as Apple Pay (AAPL) and Google Pay (GOOG) operate on a tokenization principle. Merchant tokenization is another form of this paradigm). Overall, at this point, Marqeta has issued around 400 million cards with about 100 million cards currently active.

The Marqeta platform is basically built to process payments of those issuers who use its technology to distribute cards to their customers. The Marqeta APIs allow customers to create applications that help to administer a network, to detect and deal with fraud cases, and to facilitate chargebacks that are as seamless as possible.

As mentioned, the company’s business model essentially is based on receiving a fee that is generated by card transactions processed across the company’s platform. In addition, the company does charge fees for monthly platform access, fees created by ATM usage, fraud monitoring and providing developers and current customers with tokenization services. The contracts that Marqeta has with the various card networks have incentive fees built in which are based on Marqeta directing a certain level of volume to a particular network. Last quarter, because of the unexpectedly strong volume, incentive fees were noticeable and led to gross margins of 49%, compared to 41% in the year earlier period. For the full year, including this recently reported quarter with incentive fees, gross margins were 45%, up from 41% in the year earlier period. The CFO was cautious in his projection of gross margins for all of 2022, as incentive fees can be less predictable than many other metrics on the income statement. Incentive fees will inevitably be lower in Q1, and will probably reach a peak, if they are earned in Q4.

It is somewhat difficult to associate a TAM with the specific services and API’s that Marqeta is offering. There is no particular TAM associated by 3rd party research firms with what Marqeta sells to its users. The company CEO in this latest conference call talked about the magnitude of TPV potential, which compared to the $111 billion for that metric last year is enormous-many times greater. I think that from the point of view of a potential investor, the opportunity is large enough to suggest that the company’s CAGR is a function of its innovation, its execution and the relationships it already has developed with users.

While the company, in its recent earnings release, forecast full year growth of “at least mid-30s”, and suggested that growth would compress after Q1 during which the forecast for growth is 50%. In the wake of the recent earnings release and forecast, the 1st Call revenue growth consensus has become 37%.it needs repeating that last quarter, the company had a DBE ratio of 175%. It is self-evident, I imagine, that the growth of the company’s installed base alone, is more than sufficient to for Marqeta to over-attain the forecast it recently articulated. Most of the DBE ratio is based on rising transaction volumes, and some of it is a function of current users expanding into new geographical markets in which they use Marqeta services. While transaction volumes can show variations quarter to quarter, and it would be over-optimistic to assume that Q4 was anything other than an outlier, just about all classes of Marqeta customers are seeing continued strong growth in their volumes of transactions.

The company CEO actually suggested during the call, that the growth in the existing base was at such elevated levels that Marqeta did not pursue all of the available new business opportunities. The number and scope of those opportunities is probably surprising to some readers; I know that many of the partnerships that Marqeta has been establishing, and its recently acquired customers, include services offered by users of which I have never previously heard. Many of these new services are with established financial institutions such as Citi and Marcus by Goldman Sachs. Selling these transactions is a lengthy and arduous process. The fact that Marqeta has closed several old-line FI’s is a significant proof point, and probably will help the company cement its market position.

It is likely that most readers who follow the enterprise software space are familiar with Bill.Com if for no other reason than its outlier valuation status. That said, Bill.Com is in hyper growth mode these days and it acquired a company called DivvyPay recently. Divvy is a service that manages accounts payable for small businesses and which offers virtual cards as part of its payables/expense management software. Divvy became a customer of Marqeta in late 2020, and Marqeta’s revenues from Divvy have soared. Divvy is not a huge customer of Marqeta, but it apparently has ramped from 0 to more than a 1% customer in a year.

It is this kind of customer that has been responsible for the very elevated growth percentages the company has reported. It can be difficult, of course, to suggest which customers and which services are going to achieve hyper growth in a given period. From an investment perspective, I imagine that the current forecast provided by the CFO, which calls for revenue growth compression of significance during the course of 2022, simply doesn’t encompass the upside potential of newer customers whose need for card issuance and payment volumes can take off. In addition, the CFO obviously has concerns with regards to the outsize growth of the companies BN/PL users that were a significant factor in the accelerated growth in Q4. Again, no one really can forecast to what extent BN/PL TPV is going to grow this year. BN/PL is well greater than 10% of TPV for Marqeta, so the exact cadence of growth from that vertical will have a material impact on the revenue growth performance for Marqeta this year, and for the foreseeable future.

Certainly, the comments of Affirm last week might suggest that Q1 is achieving stronger growth in payment volume than heretofore anticipated in this space. In addition, Marqeta is working with MasterCard’s BN/PL offering and with Sezzle who has signed up Target, while a service called Figure Pay which also has a BN/PL offering is a Marqeta customer.

The CFO also suggested that growth might be constrained because of the larger base of the comparison. As mentioned, Block/Square is Marqeta’s largest customer by a significant amount, so the trajectory of Block’s GMV growth will significantly influence the trajectory of Marqeta’s GMV growth.

Square became a Marqeta customer in 2016. Its agreement with Square includes both the Cash App and Square’s card that is used as a payment method for merchandise. The agreement has an incentive rate that kicks in at certain volume tiers. Last quarter, Square’s growth in GPV was 45%, slightly below the full year increase of 49%. In the first two months of the year, GPV growth for Square was 35%. The current agreement runs through 2024. As part of the agreement, Marqeta issued Square warrants to purchase up to 1.1 million shares at $.01/share.

During Block’s earnings discussion, that company has said that growth had been constrained in January due to the effects of the Omicron Variant on retail activity. Block’s Cash Card has apparently seen comparable growth to that of the Square merchandise card. Afterpay, which is now part of Block, saw 54% growth in GMV at the end of last year.

With the waning of the impact of Omicron, growth accelerated in February and Block has forecast further growth acceleration in March. Overall, the Marqeta CFO has forecast, and the 1st Call consensus reflects, a percentage growth this year of 37%. Given just how this company’s revenue model works, I think it would over-stating the case to call guidance a “forecast.” In particular, given Block’s forecast for GMV growth, and the correlation between that growth, and Marqeta’s growth, it appears that the CFO’s forecast is particularly “prudent.” I obviously think that some of the most recently announced customer wins, and the geographic expansion into the APAC region do not seem to be part of the CFO’s revenue forecast. The expectation I have used in my valuation analysis that Marqeta will be able to achieve revenue of $760 million, or around 47% growth this year, although my 3-year CAGR estimate is 39%.

In February, Marqeta and a company called Plaid announced a collaboration and integrations. Plaid is one of the newer fintech offerings which is aimed at developers. Plaid offers developers a suite of API’s of various kinds that allow users to build complex fintech applications. Very few of Plaid’s customers are household names, but the company has seen explosive growth. Given the market momentum of Plaid, and the focus of Marqeta, this partnership is likely to be more significant than many other such announcements with many cross-sell opportunities, and improved functionality for end-users.

Marqeta, as was recently pointed out during its conference call, has expanded its spend on due diligence around potential acquisitions. One marriage that would make lots of sense would be the combination of Plaid and Marqeta. That said, the most recent private equity valuation of Plaid, before the massive rerating of all hi-growth IT names, was nearly $14 billion. These days, such a valuation, which is basically at an EV/S of 70X, is not even on the same continent when compared to the other publicly traded names in the fintech space. For now, I think the partnership agreement is a positive for Marqeta and will help maintain its growth at very elevated levels.

Competition for Marqeta

The FinTech space has vast number of competitors chasing an immense market. Most of Marqeta’s competitors, who are offer directly comparable services, are legacy company such as Fidelity National (FIS), Fiserv (FISV), First Data and Wex (WEX) who have been selling to FI’s for years. Not all of these vendors really match up specifically against Marqeta; for example, Wex has a focus on providing cards for fleets of vehicles as well as the travel and healthcare industry.

Marqeta maintains that it has created modern card issuing and that it has a significant first mover advantage in the industry because of its pioneering status. Given the customers the company already has, and its recent success with some of the more well-known, old-line FI’s it is not a claim I would want to refute.

While there are certainly many other companies that can provide cards to merchants and FI’s, the space, like many other IT spaces really, is one of constant innovation and enhanced feature/function offerings. I am not really able to evaluate all of the claims on the part of Marqeta and other card issuers. But obviously, the ability this company has shown in terms of its ability to win deep competitive bake-offs strongly suggests that the company’s stated competitive advantages are real. Currently, Marqeta’s technology advantages include the offering of open API’s, In addition, the company offers a technology based on Just in Time funding.

JIT is a big deal for many consumers who have multiple accounts at a given FI from which they have the need to access in order to make payments. Funding an account during the transaction process can be a significant differentiator for some FI’s. Finally, there is the offering of tokenization as a service. The later capability, in which Marqeta has been a first mover, apparently was the deciding factor in Marqeta’s recent win at Citi.

For many readers, I imagine, and for this writer as well, not all of the payment innovations in the space seem all that necessary. I have two cards-and if I weren’t receiving SS payments, I would make do with one. But my specific requirements are not those of the modern world. According to various studies which the CEO cited on this last conference call, by next year, 60% of global digital commerce is expected to be made through the use of alternative payment technologies. Developers, of whom there is an existential shortage, are focused on providing users with a modern digital experience. While some readers will scoff at the buzzwords, it is more than that, and younger consumers will increasingly forsake merchants and FI’s who can’t provide them with a modern experience.

I have written over the years about just how successful companies whose focus is on the developer community can be. Regardless of what one might think of Twilio (TWLO) or GitLab (GTLB) or JFrog (FROG) as investments at this point, their growth shows the need developers have for tools that enable the construction of modern experience. That is really the business in which Marqeta competes, i.e. providing tools for developers, rather than just issuing cards which most readers will think about as a commodity.

Marqeta competes by providing users with the ability to innovate their offerings continuously, to provide card issuers with flexibility and control, and to scale offerings to substantial levels if required. In other words, Marqeta is a pick and shovel company making some of the key tools that are required by fintech companies to create the applications that animate and drive the growth of their businesses.

Overall, creating cards either with or without tokenization, and either physical or virtual is never going to be a space dominated by any one company or even any group of companies. Probably the most significant competitors of Marqeta are Stripe and Ayden (AYDN) in the sense that both of these companies are offering their users new technology for most parts of the payment process and they issue cards. These are both extremely fast growing and innovative competitors, but their focus in most certainly not on the card issuance business segment, and they don’t have the very specific domain expertise in card issuance or tokenization. Marqeta, because of the nature of its cost buckets doesn’t precisely disclose the amount it is spending on what might be described as research and development. That said, I would be extremely surprised if any other competitor is currently making anywhere near the investment of Marqeta simply on creating enhanced card issuing technologies coupled with a payments infrastructure.

Marqeta’s business model

Marqeta does not have a typical software company business model. That is not necessarily a negative, but the company will experience far different cost ratios even when compared to other fintech software vendors. The company has a substantial cost of revenue, and gross margins are always going to be far less than those achieved by other software companies that I follow. Again, different does not mean worse. Based on the company’s commentary, I expect that expecting a non-GAAP gross margin in the mid-40% range is reasonable. With that kind of gross margin profile, Marqeta is unlikely to achieve or maintain the kind of EV/S valuation that some enterprise software companies achieve

Marqeta’s non-GAAP gross margin last quarter reached 49%, an all-time record, because of incentive payments it received from users, particularly Block, as described earlier in this article. For the most part, gross margins are essentially correlated with processing volume. As some new customers reach higher volume levels they will enjoy better pricing tiers, while some customers have contracts that award Marqeta incentive payments based exceeding certain volumes. The incentives are seasonal in nature and see a trough in the June quarter, and then can accelerate.

The largest single cost factor for this company below the gross margin line has been compensation and benefits. This a catch-all category and includes the costs associated with development personnel as well as general and administrative expenses. Sales and marketing costs are very low; far below what would be seen for an enterprise software company. There has not been an identifiable seasonal pattern thus far in the company’s compensation expenses. Last quarter, those expenses grew by 128% year on year, but by less than 5% sequentially. They actually fell by a noticeable amount sequentially in the prior quarter, after doubling from Q1 to Q2. Some of the changes in the compensation line reflect the recognition of stock based compensation expenses which were recorded when the company went public. On a non-GAAP basis, compensation expense in the quarter rose by 77% year on year, comparable to the growth in revenues.

Overall, I imagine that Marqeta is going to achieve substantial leverage in terms of compensation as the business scales. The company’s second largest expense category is Technology. Technology spending is mainly 3rd party hosting fees. To some extent, these fees are incurred in advance of volumes coming onto the platform from new users. On the other hand, over time, 3rd party hosting fees will most likely decline as a percentage of revenues as the company’s usage continues to scale and it is able to negotiate more favorable contracts with hosting concerns.

The company’s stated goal is to achieve a non-GAAP EBITDA margin in the mid-20% range. What hasn’t been said is the cadence of that attainment. And that, of course, is correlated with the revenue growth the company can achieve. As mentioned earlier, I believe the company has provided very conservative guidance for likely revenue growth this year; if that hypothesis correct, then margin attainment will be significantly above the current projections as well.

Wrapping up – Evaluating Marqeta as an investment

Marqeta is one of the most recent of the fintech businesses to have gone public. In the current environment it would be difficult for fintech IPOs unless owners are willing to accept far lower valuations and have a record of positive cash flow. Its most recent quarterly report, which showed growth of 76% in revenues and 108% in gross margins, was a dramatic overattainment for both metrics. With that kind of growth, the company reported positive EBITDA for the quarter.

Marqeta’s most common description as an issuer of credit cards, while accurate as far as it goes, really doesn’t accurately describe what the company does. Issuing a card in the modern fintech world really isn’t just about sending consumers a piece of plastic. It is about building a payment eco-system that may involve physical cards, but also often involves virtual cards and tokenization. It needs to be particularly scalable and flexible and account for numerous requirements of many different users and classes of users. Marqeta’s real raison d’etre is that of providing the picks and shovels, or specifically, modern, open API’s that allow developers to create offerings that provide the kinds of experiences consumers expect from financial firms these days.

One of the principal risks of Marqeta as an investment is the concentration of its revenue from Block. The agreement with Block, under which Marqeta provides services for the Cash App and for the Square Card expire in March 2024 and December 2024 respectively. It is always possible that Block will develop a capability to take the functionality it now gets from Marqeta in-house. I am reasonably sure, however, that Marqeta’s management is well aware of the risk and has provided Block with pricing that is attractive enough to forestall any effort by Block to seek a separation from Marqeta. Block does have warrants to purchase Marqeta shares, but the quantity of those warrants is probably not substantial enough to factor in a decision.

In addition to Block, Marqeta has developed relationships with numerous Buy Now/Pay Later firms such as Affirm and Klarna. It has just begun to sell services to older and currently larger FI’s such as Goldman Sachs and Citi. It recently announced what is likely to be a significant partnership with Plaid.

There are many, many companies who issue cards and who might be considered as Marqeta competitors. But most of those firms have been card issuers for years and do not offer the kind of domain expertise that Marqeta offers. Some companies such as Stripe and Ayden, who are of the current generation of fintech businesses, might be considered competitors, but they really have a business focus quite removed from what Marqeta offers.

Marqeta’s guidance, in the wake of its just ended quarter was quite conservative. Indeed, the CFO said that part of the reason for the conservative guidance was that the exceptional results of Q4-2021 have set up a difficult comparison for Q4-2022. And Marqeta gets most of its revenues from interchange fees on transactions, i.e. the payments transacted across its platform. I am not going to speculate on how the current geopolitical situation plays out in terms of a recession. But this not an enterprise software company, and if there is a contraction in consumer spending, then it could impact the growth the company might otherwise achieve. Even one of its newest star customers, Bill.com, could see a slowdown in the payment volume it transacts using Marqeta should there be a recession.

Marqeta’s valuation has compressed substantially, despite the strong quarter it reported, and its upside guidance. I have projected 45% revenue growth in 2022, and at that level, the company’s EV/S ratio is now around 5X.

Marqeta actually reported significant free cash flow in Q4, and for all of 2021. Much of its free cash flow generation comes from the revenue share metric, which was particularly strong, both in Q4 and for the full year. Some of that is related to the impact of incentive payments and accruals as discussed earlier in this article.

Because Marqeta is already achieving positive free cash flow, and its EV/S valuation is compressed, it isn’t terribly surprising that my estimate of the company’s net present value is more than 2X above the current share valuation. I have currently initiated a small position in Marqeta shares in some of my managed accounts. In this fraught environment, I have been very disciplined in adding new names, and have been very opportunistic in terms of placing buy orders.

Marqeta is a niche vendor in a very hot space. Often such vendors get acquired. Given how far underwater this name is compared to its IPO price ($27/share), I doubt if the board would consider a buyout and indeed, I think Marqeta, based on the rather substantial amount they paid last quarter for what is described as “Due diligence costs related to potential acquisitions” is likely to expand its footprint and TAM substantially through inorganic transactions. It would be a coup, indeed if Marqeta and Plaid could come together, but just how VC’s who invested in Plaid at a valuation of almost $14 billion might perceive such a combination is, at the least, a fraught question.

The fintech space has not been a source of positive alpha over the past 5 months. Investors have not responded with any particular enthusiasm to good news. I can recapitulate all of the issues that are said to impact valuations for various fintech names. But I believe that the negative attitude toward fintech names overall has presented investors with opportunities. Marqeta has its share of risks and uncertainties, and it doesn’t have a software business model. I feel those risks are adequately discounted by the share price and thus I believe that there is plenty of positive alpha potential for Marqeta shares.