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Slight Downdraft For Payments Stocks As Earnings Season Wanes

Stocks slide

The earnings season may be waning, but its impact on stocks has not diminished one iota. In fact, the season saw stocks weighted a bit to the downside.

This past week, one name saw double-digit percentage gains: retail banking company Green Dot Corporation, the prepaid Mastercard and Visa debit card issuer. Green Dot shares soared more than 14 percent on the week, buoyed by an earnings report early on that showed net income of 55 cents per share versus the expected 40 cents per share. The company reported its organic top line growth at approximately 12 percent, and Green Dot’s processing and settlement growth were also up double digits.

In addition, the company boosted its annual revenue guidance.

Secure payments services provider Worldpay’s shares gained 8 percent on the week, following news reported by Reuters that credit card processor and POS solution provider Vantiv’s deal to acquire it had reached the stage of finalized, formal offer. The widely-reported deal is purportedly worth approximately $10 billion.

But turning to sliding earnings, American financial security and service corporation Diebold Nixdorf was off 9.9 percent on the week, with little company news to explain the decline. It may be worth noting, though, that following an earnings report released in mid-July, CNET reported security researchers had shown how one of the firm’s more popular ATMs could be hacked to turn it into a “cash fountain.”

Separately, ePort platform and cashless acceptance technology provider USA Technologies lost 50 cents a share this week, a decline of approximately 8.6 percent. Company-specific announcements have been scarce, but the firm did announce news at the end of last month that it had generated gross proceeds of $43 million from the sale of 9.6 million shares via public offering. This indicated at least some dilution to existing holders before the offer.

In addition, a stock market insights report from Seeking Alpha published this past week posited the USA Technologies stock has 40 percent downside on potential margin pressures, even amid impressive top line growth.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 AML/KYC Tracker provides an in-depth examination of current efforts to stop money laundering, fight fraud and improve customer identity authentication in the financial services space.

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