Morgan Stanley's analyst team completed a review of first-quarter 2026 financial results for three companies in the payments and processing space, keeping a broadly cautious tone and making selective price target adjustments tied to execution and profitability questions.
Summary of firm-level positions
The firm maintained an Equal Weight rating on Jack Henry & Associates, Inc. (JKHY) and Marqeta Inc. (MQ) and an Underweight rating on NerdWallet, Inc. (NRDS). Morgan Stanley trimmed Jack Henry's price target, left Marqeta's target unchanged, and set a price target for NerdWallet reflective of its more cautious posture.
Jack Henry & Associates, Inc. (JKHY)
Morgan Stanley kept an Equal Weight rating on Jack Henry and reduced its price target to $170 from its prior level. The bank highlighted meaningful momentum in Jack Henry's core banking system wins through the first part of the year: 43 year-to-date core wins versus 28 in the comparable period last year, including 11 wins from institutions with assets greater than $1 billion compared with eight such wins a year earlier.
Management signaled confidence in exceeding last year's total of 51 wins and suggested the company could return to its historical win range of 50-55. The firm emphasized that competitive dynamics appeared to favor Jack Henry in the quarter, noting that 13 of 17 competitive wins were taken from a single provider. That concentration supports the view that platform migrations by competitors could continue to feed core win momentum into fiscal 2027 and beyond.
Deal sizes also appear to be improving, Morgan Stanley observed: 25 year-to-date wins across Core, Digital and Card versus eight at the same point last year. Yet the analyst house warned that investors will likely keep debating the timing and scale of the opportunity given long implementation timelines and uncertainty over how quickly disrupted competitors will convert. On earnings assumptions, Morgan Stanley modestly raised its estimates but lowered its price target, applying a 23x multiple to its base-case calendar 2027 adjusted diluted EPS estimate of $7.38.
The company's reported third-quarter fiscal 2026 results showed revenue of $636.25 million and earnings per share of $1.71, both of which exceeded analyst expectations. Separately, Raymond James lowered its price target on the company to $188 while retaining a Strong Buy rating.
Marqeta Inc. (MQ)
For Marqeta, Morgan Stanley maintained an Equal Weight rating and kept its $5 price target unchanged. Marqeta reported first-quarter net revenue and gross profit growth of 19% year-over-year, results the firm said were at the high end of guidance. Adjusted EBITDA expanded 66% year-over-year and the company delivered positive GAAP net income in the period.
Product-level strength included BNPL and Expense Management growth of 60% and 40% year-over-year, respectively. Despite solid top-line expansion and improved profitability metrics, Morgan Stanley flagged weakening take rates as a concern - take rates fell to 0.139% from 0.156% in first-quarter 2025 and 0.150% in fourth-quarter 2025.
The firm noted that management did not translate the high-end net revenue and gross profit outcomes into a higher full-year guidance, even though assumptions for net new issuance headwinds from Block were moving toward the lower end of its previously communicated 1.5-2 point range. In the company's results, Marqeta recorded revenue of $165.8 million and reported GAAP earnings per share of $0.02 in Q1 2026, marking its first quarter of GAAP profitability. The company also announced the appointment of Lukasz Strozek as its new Chief Technology Officer.
NerdWallet, Inc. (NRDS)
Morgan Stanley retained an Underweight rating on NerdWallet and set a $9 price target. The analyst team drew attention to an elevated level of performance marketing spend, which stood at $122 million and represented 54.9% of revenue in the quarter. That intensity suggests the company is relying heavily on paid acquisition and raises questions about the sustainability of margin improvement absent better monetization.
Morgan Stanley also cited a reduction in the low end of NerdWallet's 2026 adjusted operating income outlook, attributing the change largely to weaker monetization from a large auto insurance partner and to higher investment levels intended to address those challenges. In its Q1 2026 results, NerdWallet reported earnings per share of $0.29 - a small beat versus forecasts - while revenue of $222.2 million missed expectations.
Implications and investor focus
Across the three companies Morgan Stanley examined, common investor concerns center on execution timing, revenue conversion, take-rate trends and the durability of profitability improvements when marketing intensity remains elevated. The firm balanced encouraging operational indicators - such as Jack Henry's competitive wins, Marqeta's revenue and gross profit growth and positive GAAP income, and NerdWallet's modest EPS beat - against the timing and sustainability questions that could constrain near-term upside.
Investors tracking payments and processing names will likely focus on the pace of conversion from competitive wins into revenue at Jack Henry, any continued pressure on Marqeta's take rates and the trajectory of NerdWallet's monetization as the company absorbs elevated marketing investments.