Shares in payment solutions company Tyro Payments Ltd (ASX: TYR) opened the week down and are now inching more than 2% lower at $2.57.
Tyro has been on an extended run downwards these past 3 months, with shares collapsing from a high of $4.12 last November.
In today's session, Tyro provided a glimpse of its weekly transaction value updates until 7 January 2021 in keeping with prior commitments. The company had pledged to share this data until the publication of its full year results for FY22. Here are the details.
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What's up with the Tyro share price today?
Tyro shares are walking lower today despite the company demonstrating a positive gain in transaction value across all time frames since the onset of FY22.
So far in FY22, the company has grown transaction value more than 20% year on year in every single month until January.
The highest growth period came in November last year, with the company securing $3.095 billion in transaction value, a 43% gain from the year prior. December transaction value was also 35% higher than the same period in FY20.
As of 7 January 2022, the company boasts $16.371 billion in transaction value, a considerable 31% year on year gain from FY21.
This is already 64% of FY21's total of $25.454 billion even though we are still in the first month of the fiscal year.
Even though the announcement exhibits a number of positive factors to Tyro's growth narrative today, the market has disagreed, amid a broad-sector selloff in ASX tech shares that's been in situ since November.
The yield on the benchmark 10-year US Treasury note recently touched 1.8%, its highest mark since the pandemic wreaked havoc on fixed income markets. It is currently a few ticks down at 1.76%.
As the US Fed positions itself to tighten monetary policy by tapering its quantitative easing (QE) programs this year, the markets are pricing in no less than 3 rates hikes throughout 2022, according to equity strategists Yardeni Research, Inc.
Rising yields on US Treasuries is a negative for valuations on assets like stocks, and the impact is disproportionate to unprofitable tech companies like Tyro that may also be trading at a premium.
As such, investors are leaning away from growth-type stocks and rotating towards more value-orientated or defensive positions, explaining the downside move in the ASX tech basket lately.
The stress appears to have continued this week for ASX tech shares like Tyro who rely on a bottom-heavy US 10-year yield to justify trading at such lofty valuations.
Tyro share price snapshot
The Tyro Payments share price has plunged almost 22% in the last 12 months after sliding more than 9% in the previous month alone.
Year to date it has fallen another 10% and the weakness has continued this past week with shares giving away another 10%.
Each of these results is behind the S&P/ASX 200 Index (ASX: XJO)'s gain in the last year.
