September hasn’t been a great month so far for the EML (ASX:EML) share price

Let’s find out at what has transpired.

| More on:
a woman with a narrow mouthed face looks down as she cuts her credit card with a pair of scissors.

Image source: Getty Images

September has not been kind to the EML Payments Ltd (ASX: EML) share price.

Since the start of the month, shares in the payments company have tumbled more than 5%.

In comparison, the S&P/ASX All Technology Index (ASX: XTX) has clawed 1.3% higher for the month.

Let’s take a look at why investors have been bidding the EML share price lower this month.  

What’s been weighing down the EML share price?

Despite a strong start to the month, shares in EML have struggled to stay in the green.

Interestingly, the payments company has not released any major or price-sensitive news since the start of September.

As a result, there are various catalysts that could explain the recent weakness in EML’s share price.

In addition to broader volatility in domestic and international markets, the company has also had to battle uncertainty surrounding its Irish regulation issues.

The EML share price was rocked earlier this year after the Central Bank of Ireland voiced concerns over the company’s anti-money laundering financing compliance.

Additionally, investors could be re-rating shares in the payments company following its full-year results.  

How did EML perform in FY21?

For FY21, EML reported a record year with growth across a majority of its financial metrics.

Highlights from the company’s full-year report included;

  • Group gross debit volume (GDV) up 42% to $19.7 billion.
  • Record revenue of $194.2 million, an increase of 60% on FY20.
  • Record underlying group earnings before interest, tax, depreciation, and amortisation (EBITDA) of $53.5 million, up 65%.
  • Gross profit margins of 67%, down from 73% in FY20 due to a shift in business segments.
  • New business GDV pipeline of $10.5 billion, with more than 300 prospects.
  • Costs and provisions totalling $11.4 million in FY21 in relation to the Central Bank of Ireland regulatory investigation.

For FY22, EML is expecting to generate underlying EBITDA in a range of between $58 million to $65 million.

In response, the EML share price tanked more than 5% after releasing its report.

Snapshot of the EML share price

Despite a promising start to the year, the EML share price was shaken by regulation issues in Ireland.

Shares in EML have struggled to recover from the events and remain more than 5.5% lower for 2021.

The EML share price gained some of its losses back yesterday, closing higher at $3.96.

Should you invest $1,000 in EML Payments right now?

Before you consider EML Payments, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and EML Payments wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended EML Payments. The Motley Fool Australia owns shares of and 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.

More on Share Fallers