13 Best Growth Stocks Under $10 to Buy

3. Marqeta, Inc. (NASDAQ:MQ)

Number of Hedge Fund Holders: 35

Founded in 2010 and with its headquarters located in Oakland, California, Marqeta, Inc. (NASDAQ:MQ) offers its clients a card-issuing platform that includes all the infrastructure and tools required to enable tokenized, digital, and physical payment solutions without relying on a traditional bank. Without having to develop the underlying technology, the company’s open APIs enable partners like DoorDash, Klarna, and Block to quickly develop and implement cutting-edge card-based products and payment services. The company’s main sources of revenue are the ATM and processing fees for cards that are issued through its platform.

Although the company’s volume and revenue have increased quickly lately and improved margins, the company is still loss-making. Since Marqeta’s operating costs are primarily fixed, processing more debit and credit cards that are issued on its network inevitably results in larger margins for the company, which paves the way for profitability as volume increases. Without any prior payment experience, the Marqeta card-issuing platform offers its clients the application programming interfaces (APIs) and infrastructure required to quickly develop and implement cutting-edge card payment systems. Block and other buy-now-pay-later companies are among the fintech and technology companies that have benefited from Marqeta’s platform’s special features and flexibility. As digital card issuance and tokenization are two of its strengths, Marqeta continues to gain from the strong organic growth its client base offers and the shift to digital payments.

A change in Cash App’s reporting resulted in a 45.8% year-over-year decline in Q2 2024 in revenue for the company, with 2024 being the final quarter affected. Except for Cash App, robust financial services transactions and the growth of risk solutions, however, point to the possibility of further growth.

Moreover, its agreement with Block has been extended until 2028, giving the company time to address customer concentration issues before the next contract renewal.

Marqeta, Inc. (NASDAQ:MQ) has a Buy recommendation from Andrew Bauch due to its leadership in modern card issuing, variety of growth prospects, and growing alliances with companies such as Visa and Varo Bank. In addition to underlining the stock’s undervaluation and holding a $7 price objective, he anticipates sustained revenue growth, TPV expansion, and increased profitability.

Jim Simons’s Renaissance Technologies is the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 9,628,988 shares worth $52.77 million as of Q2.