Why the Humm (ASX:HUM) share price just hit a 52-week low

The Humm Group Ltd (ASX:HUM) share price is under pressure today despite the release of a solid third quarter update…

| More on:
a trader on the stock exchange holds his head in his hands, indicating a share price drop

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Humm Group Ltd (ASX: HUM) share price is under pressure on Thursday morning.

At the time of writing, the financial services company's shares are down 2.5% to a 52-week low of 85.5 cents.

Why is the Humm share price tumbling?

Investors have been selling the company's shares this morning after weakness in the tech sector offset a reasonably upbeat trading update.

According to the release, Humm's buy now pay later (BNPL) business reported record transaction volume of $100.8 million during the month of March. This led to its third quarter volume reaching $264.8 million, which was up 33% on the prior corresponding period.

The Commercial and Leasing business is also performing well. It reported volume of $142.2 million, up 61.7% on the prior corresponding period.

However, things weren't anywhere near as positive for its Cards ANZ segment. It reported volume of $264.8 million for the quarter, which was down 33% on the prior corresponding period. Positively, management advised that spending is returning to key volume categories now.

At the end of the period, Humm had a total of 2.7 million customers across its businesses. This is up 40% on the prior corresponding period.

It will be hoping to boost these numbers with its UK launch in the near future. Management advised that it is on track to launch in the lucrative market this financial year. The company is also looking at the Canadian market and is aiming to launch there in the first half of FY 2022.

Management commentary

Humm's Chief Executive Officer, Rebecca James, was pleased with the quarter.

She said: "hummgroup has performed strongly with our bigger Buy Now Pay Later product – and the ability to finance larger ticket items over longer terms – continuing to be a key point of differentiation. The business delivered record transaction volume for our BNPL segment in March of $100.8m, eclipsing peak seasonal trade, normally reserved for December. The strong growth coincided with an improvement in net transaction margin driven by strong loss performance and low cost of funds.

"The Commercial and Leasing segment is growing rapidly, up 61.7% on pcp, driven by a superior service proposition which has the business gaining market share from the major banks. Credit performance has also improved materially from the previous period. The business is significantly more capital efficient following the successful completion of a $450m Australian asset-backed securities transaction. Mezzanine warehouse funding is planned to further improve return on equity, in line with the initial recommendation of the strategic review," the Chief Executive Officer added.

She also advised that the company continues to expect its second half cash net profit to be lower than the first half.

Following today's decline, the Humm share price is now down 23% since the start of the year.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Humm Group Limited. 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

Bored man sitting at his desk with his laptop.
Share Fallers

Why Catalyst Metals, Duratec, Nufarm, and Rio Tinto shares are dropping today

These shares are ending the week in the red. But why?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why Dexus, Mayne Pharma, Nufarm, and Treasury Wine shares are falling today

These shares are having a tough session on Thursday. But why?

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why James Hardie, Mayne Pharma, Nufarm, and Resimac shares are falling today

These shares are having a tough time on hump day. But why?

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Kogan, Monash IVF, OFX, and ResMed shares are falling today

Why are these shares taking a tumble today? Let's find out.

Read more »

A young male investor wearing a white business shirt screams in frustration with his hands grasping his hair after ASX 200 shares fell rapidly today and appear to be heading into a stock market crash
Share Fallers

Why Appen, DroneShield, Gentrack, and New Hope shares are dropping today

These shares are starting the week in the red. But why?

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Dexus, Dusk, Fletcher Building, and Paladin Energy shares are falling today

These shares are ending the week in the red. But why?

Read more »

Couple look at a bottle of wine while trying to decide what to buy.
Consumer Staples & Discretionary Shares

Treasury Wine shares: Buy, hold, or sell? Here's Macquarie's take

What is Macquarie forecasting for Treasury Wine shares amid the CEO’s unexpected exit?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why Newmont, NRW, Peet, and Treasury Wine shares are dropping today

Let's find out why investors are selling down these shares on Thursday.

Read more »