CAB Payments (LON: CABP) share price has collapsed, a few months after the company went public in London. The stock crashed by more than 74% on Tuesday and reached an all-time low of 52.5p. It has dropped by over 82% from its all-time high, giving it a market cap of just 149 million pounds.
CAB Payments is a fintech company that provides services in hard-to-reach countries. It owns Crown Agents Bank, which is involved in the forex trading industry. The company is backed by Helios, Fidelity, and Blackrock and went public in London a few months ago.
CAB Payments share price collapsed on Tuesday after the company warned about its business performance. Its total revenue year-to-date rose to 105.5 million pounds, weaker than what it was expecting.
The company is facing numerous headwinds. For example, key African currencies like the Nigerian naira, Central African franc (XAF), and West African franc (XOF) have plunged. The Nigerian naira collapsed to 1,000 against the US dollar as concerns about the economy worsens.
As a result, CAB Payments warned that its business will continue facing headwinds in the coming months. And the situation could worsen as the US dollar index (DXY) continued its bullish trend.
It now sees its revenue for the year being about 17% below its previous guidance. I believe that the real result will be worse than its guidance as the industry faces major challenges. The company said:
“Should the current market conditions persist in some of our key currency corridors, as described above, the softer exit rate from 2023 could result in 2024 revenue growth falling below the medium-term potential.”
CAB Payments share price forecast
Therefore, the question is whether the CAB Payments stock price has room to bounce back in the near term. I believe that the company’s headwinds makes it difficult to bounce back. For one, unlike other companies that have been public for a while, CAB Payments is a newly publicly traded company.
It is also a thinly traded company. Most importantly, the company has no way to handle the ongoing currency headwinds in emerging markets. Therefore, there is a likelihood that the stock will remain under pressure in the coming months.
A rebound will only happen when the currency situation in countries like Nigeria and Central Africa improves. Also, it will happen after the company publishes its next financial results.
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