Why is EML payments (ASX:EML) share price having a rollercoaster start to the year?

The ASX payments solutions provider has had a yo-yo start to the year.

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Key points

  • The EML Payments share price is zigzagging so far in 2022
  • ASX 200 buy now, pay later shares are following a similar pattern
  • The company’s share price is in the green after a shocking 2021

The EML Payments Ltd (ASX: EML) share price has been up and down since the start of the year.

The company’s shares are currently swapping hands at $3.245, up less than 1% since 31 December. However, the EML Payments share price fell to $3.09 on 6 January before bouncing back to $3.29 on 12 January.

Let’s take a look at what’s been happening with the company lately.

Tech volatility

EML Payments’ shares have had a rocky ride so far in January. Between market close on 4 January and 6 January, the company’s shares dropped 6.65%.

Then, between market close on 6 and 12 January, they rebounded 6.47% before dropping another 3.43% between 12 and 14 January. Since then, EML Payment shares have gained 2.52%.

The company’s share price has followed a similar pattern to the S&P/ASX All Technology Index (ASX: XTX) as well as fellow buy now, pay later shares, including Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P).

In fact, the shape of the curves for these shares look almost identical in January.

Technology shares have been responding to the movements of the NASDAQ-100 Technology Sector Index in the United States. Speculation of interest rate rises in the US led to a tech sell-off in early January.

It triggered ASX 200 tech shares to follow a similar trend. The Afterpay share price was hammered along with that of EML Payments. But since then, ASX technology shares, including EML Payments, have recovered in line with their US counterparts.

Two non-price sensitive news announcements on EML Payments have also been released in recent days. Firstly, the company has partnered with international fintech company REPX to provide a payment product for European soccer fans.

Secondly, the company’s Nuapay business has partnered with payment platform Cocoon on a technology solution to save processing fees on automotive purchases.

Not all EML Payments’ international ventures have fared so smoothly, however. The EML Payments share price fell 23% in the past year on the back of regulatory concerns from the Central Bank of Ireland (CBI).

However, news in November that the CBI would permit the business to sign new customers and launch new programs helped the share price to recover towards the end of the year.

EML Payments share price snap shot

The EML Payments share price suffered a 12% drop in the past 12 months. By comparison, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned around 12% in the same time period.

In the past month, the company’s shares are up 7.24%, climbing 1.24% in the last week alone.

The company commands a market capitalisation of roughly $1.2 billion at its current share price.

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.

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*Returns as of January 13th 2022

The author has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Afterpay Limited, EML Payments, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Afterpay Limited and 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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