The Splitit Payments Ltd (ASX: SPT) share price has struggled over the last few weeks and has lagged the major benchmark indices.
Whereas the S&P/ASX 200 Index (ASX: XJO) has slipped 3% into the red over the last month, shares in the payments services company have fallen 32% in the same time.
Let's dive in a little deeper to understand why.
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What's been in front of the Splitit share price lately?
One interesting takeout for investors is that there appears to be a peculiar mix in the dynamics between the company's fundamental performance and the performance of its share price.
For instance, Splitit recognised record half-year results in its most recent earnings report last month. Merchant sales volume (MSV) grew 94% year on year. At the same time, gross revenue increased by about 80% to US$5.5 million.
Keep in mind that Splitit already recognised a 300% increase in revenue in its FY20 earnings report earlier in the year.
The total amount of shopping users also jumped to 566,000 in the six months to June. That's around 134,000 new shoppers added to its user base in half a year. That's not to mention a fairly robust balance sheet with US$66 million in cash and another US$150 million liquidity available.
Yet, despite these apparent strong points in revenue growth, the market has seen things differently, perhaps chasing companies turning and/or growing profits instead.
For instance, the Splitit share price was scalded in February after the company released its FY20 earnings. Similarly, it was again on the back of its half-year results. Both times its net losses widened year over year despite significant revenue growth.
Back in February, it recognised a bigger loss than the year prior of around US$4 million. However, in August, the difference was US$9,794,000 – a 109% increase on the year prior.
They say history doesn't repeat itself – but it rhymes. Certainly, we can see the market has reacted to Splitit's loss for each period in a similar rhyming fashion. Each time its share price has been punished.
And, finally, let's not forget the S&P/ASX All Technology Index is also down 1.3% over the last month, indicating broader weakness across the ASX technology sector.
The sum of these factors appears to be weighing down the Splitit share price over the last month.
Splitit share price snapshot
The Splitit Payments share price has struggled this year to date, posting a loss of 70% since January 1. This extends the loss over the last 12 months to 74%.
Both of these results have lagged the broad index's return of around 25% over the past year.
