Quick take: Payment stocks plunge on Worldline outlook

Key points in this equity note:

• Payments stocks are hit today as Worldline shares plunge 57% on fiscal year downgrade of organic revenue growth adding question marks to long-term expected growth rates in the industry.
  
  
• Our payment equity theme basket is among the worst performing themes in the equity market the past year down 6% whereas the global equity market is up 14%
  
  
• Apple Pay is a potential explanation for why the market is structurally getting nervous about long-term growth and profitability of the payments industry.

Payment stocks are getting uglier and uglier

First is was Adyen shocking the market in August with declining EBITDA and worse-than-expected outlook sending its shares down 39% on the day (they have since declined another 29%). Today, it was the French-based payment company Worldline that reported lower than previously indicated organic revenue growth for 2023 at 6-7% vs 8-10% blaming it on deteriorating macro environment in particular in Germany. Worldline shares are down 57% today taking down other payment stocks such as Adyen down 7%. Our payments equity theme basket is also among the worst performing baskets the past year down 6% vs the MSCI World Index up 14%. Our data also suggest retail investors are massively buying the dip here across many of these payment companies.