MQ

The GAAP headline (net income -$13.9M, operating margin -7.4%) understates the business. Marqeta is an asset-light issuer-processor that converts revenue to cash: operating cash flow was $163M in FY2025 (+179.6%) against just $1.83M of capex, so free cash flow runs near that $163M. On a $1.93B market cap with $709M of cash, that is an unlevered cash yield in the high single digits and an EV/FCF in the high-single-digit teens — undemanding for a company growing net revenue 23.3% to $625M and processing $382.5B of TPV (up from $291B). Gross margin of 70% confirms a structurally profitable unit model; the GAAP operating loss is driven by opex (largely stock-based comp), not by the core economics. Management is leaning into that cash: $391M of buybacks (+153%) cut weighted shares 9.6% to 462M, more than absorbing dilution.

Valuation is the crux of the buy. P/S of 3.1x for a 23%-growing, 70%-gross-margin, FCF-positive processor is modest, and stripping out the ~$709M cash pile (37% of the cap) makes the operating business cheaper still. The balance sheet supports the case: liabilities/equity is only 1.0x, current assets ($1.24B) cover current liabilities ($749M), and there is no debt stress despite the optical 101.8% jump in liabilities (largely settlement/current items, matched by current assets). Note the cash drawdown (-23.1%) is a capital-return choice, not a burn.