February proved to be a challenging month for S&P/ASX 200 Index (ASX: XJO) tech shares, impacted by rising yields and a volatile market. The S&P/ASX 200 Info Tech (ASX: XIJ) index found itself down 10% last month, compared to the 1% increase in the ASX 200.
While the tech index’s weakness is likely to dampen the performance of ASX 200 tech shares, here are the ones that exceeded expectations to be crowned as the best performing ASX 200 tech shares last month.
1. Zip Co Ltd (ASX: Z1P)
Zip was the best performing ASX 200 tech share in February. From peak to trough, the Zip share price ripped more than 90% to hit a record all-time high of $14.53.
Zip’s surging share price was driven partly by its impressive second-quarter update in late January and further boosted by the speculation that its management is considering a potential listing in the United States.
Despite their strength at the start of February, Zip shares were unable to hold onto all their momentum and closed last month at $10.40 for a 40% gain in February. The recent pressure on the Zip share price can be attributed to factors including rising bond yields, weakness in the general tech sector and buy now, pay later (BNPL) shares being sold off.
2. EML Payments Ltd (ASX: EML)
In second place, the EML Payments share price finished the month 30% higher thanks to a strong half-year results announcement. The company reported strong gains across all metrics with gross debt volume (GDV), earnings before interest, tax, depreciation and amortisation (EBITDA) and net profit after tax rising 54%, 42% and 30%, respectively.
The company also provided a solid outlook for FY21, with full-year revenue forecast to come in at between $180 million and $190 million. This represents a 48% to 56% increase on FY20.
This is the first time in the past year the EML Payments share price has made a meaningful move to the upside. Prior to February, its shares had been range-bound between the low $4 and mid $3 mark since the initial COVID-19 sell-off in March 2020.
3. Tyro Payments Ltd (ASX: TYR)
The improvement in the Tyro share price comes after weeks and weeks of grinding lower. A technical outage with its EFTPOS terminals combined with a short-seller attack saw its shares fall by more than 40% from late November 2020 to mid-January 2021.
On 22 February, the company reported its HY21 results, highlighting a 13% increase in the number of merchants using its payment solutions and a 10% increase in transaction volume.
The company also addressed the lingering damage from its terminal connectivity failures, which included providing its merchants with a dongle solution with their standard terminals as an extra level of redundancy.
Shareholders breathed a sigh of relief as Tyro shares finished February 20% higher.
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Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends EML Payments. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Tyro Payments and ZIPCOLTD FPO. The Motley Fool Australia has recommended EML Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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