The Motley Fool

Why the EML Payments share price is at an all-time high

The EML Payments Ltd (ASX: EML) share price has continued its stellar run with it reaching a new all-time high today. EML shares opened at $4.43 this morning but soon after shot up to print the new all-time high of $4.54 around 2 o’clock this afternoon. EML shares have since cooled slightly and are swapping hands for $4.52 at the time of writing.

It’s been an incredible year for EML Payments, with the company’s shares starting off 2019 at just $1.50 and banking a YTD of 202% on today’s new high. Even in the last month alone, EML shares have returned nearly 30% for the lucky investors who owned them.

Who is EML Payments?

EML is a payment solutions and software business that “aims to empower people to pay any way they choose”. EML works with a range of clients, from gaming companies like Sportsbet and Star Entertainment Group Ltd (ASX: SGR) to the Queensland Government (through its single-load prepaid ‘disaster’ cards). The company has a major presence in Europe, North America and (of course) Australia.

Why has the EML share price exploded this year?

Well things really started to take off when EML announced strong half-year results in February and ramped up when the company put out is FY19 annual report in August. Some numbers from the latter report included profit growth of 283%, gross payment volume increases of 34% and a 37% rise in revenues.

A number of successful acquisitions, including the PerfectCard DAC and Flex-e-Card platforms have also gotten investors hot under the collar.

Together with ASX companies like Afterpay Touch Group Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P), the payments space is one of the hottest growth areas of the year, and EML is smack bang in the middle.

Foolish Takeaway

Seeing as this company is trading on a price that is 138x earnings, I think EML stock is now at risky levels, despite its high-growth business. Thus, I personally will be staying away from this one at the current time, but it is one worth watching, that’s for sure!

NEW. The Motley Fool AU Releases Five Cheap and Good Stocks to Buy for 2020 and beyond!

Our experts here at The Motley Fool Australia have just released a fantastic report, detailing 5 dirt cheap shares that you can buy in 2020.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading over 40% off its high, all while offering a fully franked dividend yield over 3%...

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click here or the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.


Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Emerchants Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.