Worldline Market Value Sinks on EU Economy

Worldline shares reached record lows Wednesday (Oct. 25) as the company reduced its sales forecast.

The French payments FinTech announced it anticipates organic revenue growth of between 6% and 7%, down from an earlier prediction of 8% to 10%, causing its stock to fall 57% and wiping out $3.9 billion in market value.

“During the third quarter of 2023, some of our core geographies, in particular the German market, have shown macroeconomic slowdown,” Worldline said.

“In effect, consumers have started to allocate more of their spending to non-discretionary verticals rather than discretionary ones, impacting our growth and profitability.”

As PYMNTS reported earlier this month, consumers have curtailed spending as they expect pressure on their household budget to remain in place until at least next year. 

The University of Michigan’s latest reading of consumer sentiment dropped sharply in its preliminary October reading, and consumers surveyed by the university believe inflation a year from now will be at 3.8%, higher than the 3.2% they had forecast last month. 

Recent PYMNTS research underlined the fact that incomes are not matching inflation, an observation made by an astonishing 85% of households.

“Consumers, then, are likely gearing up for a tougher time making ends meet. That comes as the holiday season approaches, which PYMNTS Intelligence has found is a source of stress for two-thirds of U.S. consumers,” that report said. “A full 41% of consumers plan to use installment plans more heavily to help get their shopping done.”

Meanwhile, a report by Bloomberg News notes that Worldline’s plunge echoes the fate of other FinTechs recently, such as Adyen’s 44% price drop in August. These payments companies soared during the pandemic, but have struggled as consumer spending has flagged.

“While growth stocks are still desirable for the long term, investors are getting very picky instead of giving companies the benefit of the doubt like it was during the zero interest rates era,” Janet Mui, head of market analysis at RBC Brewin Dolphin, told Bloomberg.

“Old-school and boring banking is rewarding now: as interest rates rise and net interest margins are drivers of traditional banks’ earnings growth, FinTech suddenly looks less desirable.”