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What you need to know about Tyro’s share price roller coaster today

tyro share price
Source: Tyro

The Tyro Payments Ltd (ASX: TYR) share price is recovering from its morning fall after it provided its latest weekly transaction update.

The TYR share price jumped 1.4% to a two-month high of $1.65 at the time of writing when the All Ordinaries Index (ASX: XAO) and the S&P/ASX 200 Index (ASX: XJO) are trading just below breakeven.

Shares in the electronics payment provider is also performing better than most of its peers. The Afterpay Ltd (ASX: APT) share price gained 0.5% and the Zip Co Ltd (ASX: Z1P) share price added 0.6%.

Tyro share price whip-lashed by update

But its Tyro that is in focus after management said transaction values so far this month have risen by around 8% to $1.07 billion when compare to the same period last year.

Any improvement is welcomed news after transaction volumes crashed during the COVID-19 pandemic.

Volumes surged 30% in February this year compared to 2019, but slowed to 3% in March before tumbling 38% and 18% in the following two months, respectively.

Rebound still on shaky ground

The month of June then saw a 7% rebound but the recovery looks somewhat patchy. July’s gain accelerated to 11% but August experienced a 4% contraction, probably due to the second harsher lockdown of Victoria.

Investors may have decided to sell the stock initially as the month-to-date growth won’t put questions about the strength of the rebound to rest.

Can growth momentum be sustained?

There will also be doubts about the growth momentum. Unless transaction values jump in the latter half of September, this month’s growth will be lower than July.

Further, Tyro has traditionally focused on in store transactions. While it expanded into the online sphere, in shop sales are a significant revenue driver for the fintech bank.

Other factors weighing on the Tyro share price

The shutdown of the Victorian economy means that many shops have shuttered. Even in other states, customers are increasingly shopping online, which explains the surge in the Ltd (ASX: KGN) share price.

Tyro also provides loans to businesses. But in this recessionary environment, demand for credit is weak while smaller businesses are struggling to stay on top of loan repayments.

However, considering everything, the Tyro share price isn’t performing too badly even though it’s lagging many other fintecs. The stock is holding around breakeven when the ASX 200 lost 12% of its value since the start of calendar 2020.

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Returns as of 6th October 2020

Brendon Lau 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, ltd, Tyro Payments, and ZIPCOLTD FPO. The Motley Fool Australia has recommended ltd. 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.

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