$0.00
$3.75
bear $0.00
base $1.25
bull $3.75
margin of safety $0.45
market price* $18.69
Business condition attached to the margin of safety
Full-year owner earnings (cash from operations less working-capital timing, stock compensation and maintenance capex) positive, and the Block relationship extended beyond its June 2028 term.
Marqeta runs a card-issuing and payment-processing platform that lets other companies launch debit, credit and prepaid card programs. It earns a share of interchange fees on the payments those programs process. In 2025 it processed $382.5 billion of payments (up 31%) and net revenue was $624.9 million (up 23%). Block, the owner of Cash App, was 45% of 2025 revenue (47% in 2024, 68% in 2023), and one issuing bank, Sutton Bank, settled 64% of volume. How we measure earnings. We start from operating cash flow, then remove the cash benefit of working-capital swings (mainly growth in revenue-share payables and accrued expenses), then deduct stock compensation as a real cost, and then deduct maintenance capital spending, including capitalized software. The forfeited 2021 executive chairman stock award is left out of stock compensation because it was reversed unpaid in 2024. On this basis Marqeta has not yet produced positive owner earnings in any year we can measure from its filings. Per share (share count as reported in the 2025 annual filing) the figures are about -$0.33 in 2021, -$0.25 in 2022, -$0.27 in 2023, -$0.24 in 2024 and -$0.04 in 2025. The 2025 improvement of roughly $108 million reflects gross profit rising from $352 million to $437 million while adjusted operating costs stayed near $328 million. We anchor on the 2023 to 2025 window, the period since the Block contract was reset in 2023, and treat 2025 as the most representative current level. Level versus trend. Last year owner earnings improved by about $0.20 per share. The base case assumes an improvement of about $25 million a year for three years, well below that pace, so it does not start above the recent trend. The first half of 2026 supports the direction: operating cash flow of $59.8 million against $22.5 million a year earlier, with stock compensation lower. We credit only this cost leverage, and only through mid-2028, because the Block agreement for Cash App and Square Debit Card runs to June 30, 2028 and renews annually after that. Growth in payment volume, new credit products and international expansion are not counted because none is contracted. Bear case: $0 per share. Block, 45% of revenue, does not renew on current terms after June 2028 and nothing replaces that revenue; owner earnings stay negative and the business is worth nothing on this basis. The company has no debt, so it does not owe more than it is worth. Its cash and investments of $771.9 million at the end of 2025 are not added, and the company has been spending cash on buybacks. Base case: $1.25 per share. Owner earnings improve by $25 million a year through 2028, reaching roughly $0.14 per share, hold there through 2035, then fade over ten further years as the Block relationship and platform contracts age. Bull case: $3.75 per share. Gross profit keeps compounding on a flat cost base as it did from 2023 to 2025, improving owner earnings about $45 million a year for four years to roughly $0.38 per share, held through 2035 and then fading over ten years. Accounting notes and what could make this wrong. Working-capital inflows have been positive in each of the last seven years and are excluded here, which makes reported cash flow look much better than our measure. A $13.0 million securities class action settlement (net of insurance beyond a $5 million retention) awaits approval, and derivative suits remain pending. The latest quarterly data on file shows share counts roughly one quarter of those in the annual filing, which suggests a reverse split after year-end; we could not confirm that in the filing text, so per-share values here are on the annual filing's share basis and would scale accordingly. If payment volume growth converts to profit faster than we assume, or Block extends on good terms, value would be higher.