The Tyro share price has fallen 20% this month, despite solid results and increasing transactions volumes. Could now be the time to buy?
The post The Tyro (ASX:TYR) share price is down 20% in one month. Time to buy? appeared first on The Motley Fool Australia. –
The Tyro Payments Ltd (ASX: TYR) share price has fallen almost 20% this month, despite the company releasing weekly figures showing increases in monthly transaction volumes.
It seems the payment solution’s share price has also underperformed compared to other payment providers. For example, the Zip Co Ltd (ASX: Z1P) share price is down 7.5% for the month, while the Sezzle Inc (ASX: SZL) shares are down 10% for the same period.
So does this mean the current Tyro share price presents a good entry point for investors? Let’s take a look.
Why are Tyro shares underperforming?
The Tyro share price performance is somewhat baffling for investors.
For one, the company should have benefited from the full reopening of the economy, as the possibility of an early vaccine rollout has gained momentum over the past month.
This is because Tyro provides payment solutions to small-business merchants through its physical Tyro Eftpos terminals, and the full normalisation of retail businesses would be the ideal situation for the company.
The Tyro share price should also have been boosted by the recent surge in Australian consumer spending, as the Australian Bureau of Statistics reported a 3.3% growth in spending in the three months ending September.
The company also should benefit from the recently announced proposed merger of major Australian domestic payment systems – Eftpos, BPay and NPP Australia. That merger would expedite Tyro’s foray into the online payments segment as it rides on Eftpos’ online infrastructure.
In addition, Tyro reported upbeat results at its annual general meeting in October, where it revealed solid growth continuing in FY 2021 despite the pandemic.
The company reported that its payments business had maintained its merchant acquisition momentum, with 33,200+ merchants on its platform at 30 September 2020. This is up 8% on the prior corresponding period. Despite lockdowns and restrictions, the company delivered growth in transaction value year to date, with transactions standing at $6.8 billion, up 5% on the same period last year.
So after all that, the question remains: why has the Tyro share price been underperforming in the past month?
About the Tyro share price
The Tyro share price closed at $3.22 today, up 1.26%. As mentioned, the Tyro share price is down 20% for the month. On a year-to-date basis, the share price is down 8%, and is still a long way off from its 52-week high of $4.53.
The company commands a market value of $1.6 billion.
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Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tyro Payments. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.